Your home is just so lovely, I don't think you should remove all that architectural detail. What are the dimensions of the laundry room? I'm wondering if there is opportunity to turn that into an efficient office space (not legal bedroom.) Maybe you could leave the living room and dining room alone and put that part of the budget into an efficient shower bathroom with stackable laundry so the laundry can become office space or guest space if there's room for even a daybed?

I would start out with a large, beautiful rug in warm colors (terracotta or red Oriental rug mixed with other colors. I feel sectionals often confine you in how to organize your room. I would choose a fabric couch in a neutral, not too dark color (not gray, which is on its way out and not a warm color), and add two chairs in a different color or at least a different material and style. Try to keep the height of these pieces similar. Two end tables in wood (they don't have to be the same, but make sure the heights are fairly similar and a metal and glass coffee table would look great, with table lamps or floor lamps even if you have overhead lighting, which is always harsh. Pick colors from the rug for pillows and you'll have a beautifully coordinated living space. Books, good paintings and some tall plants will add warmth and personality to your room. People too often don't add these elements and then wonder why their rooms look bare and cold. This may be more colorful than you want to go. and this is a small rug because there is carpeting underneath, but it gives you the idea of neutral furniture and how it can be made more lively with accessories, pillows, coffee table styling etc.

THANKS FOR THE PHOTOS, I WOULD NOT RECOMMEND A BIG AREA RUG IN THE CENTER BECAUSE IT WILL UNBALANCE THE DINING CHAIRS EVERY TIME YOU USE. YOU CAN ADD A RUG UNDER THE CHAIRS IF YOU HAVE ENOUGH SPACE A FOOT REST WOULD BE NICE IN FRONT OF IT. SOME INSPIRATIONAL PHOTOS MIGHT HELP

depends on how you live..your budget ..plans..etc, The dining zone in an open area can be made special/a destination with large pedestal table/ceiling fixture above/ really comfortable chairs and USE the seating for more than just mealtime. Or a smaller rectangular /drop leaf table can be pushed against the wall and your living zone chairs back into the space a little more because this is open. You could put a longer /narrower farmhouse/trestle table of a vintage sort with fun chairs/cushions and dress it all up for Holidays and so on. If that's a fridge [lower box], I might consider pantry cab adjacent and remove bakers rack, esp right now, and look at the whole space with different kinds of tables in mind...how each would fit in?, appropriate types for you folks? /etc.