The pulled loops along the wall are from the installers power stretcher. Carelessness and ignorance. As far as the cuts in the carpet, can you stick your finger in there? If so, also caused by the installer, specifically his carpet knife... Carelessness and ignorance once again. Call the company you purchased from and request a rep from the manufacturer to come out and inspect the installation. Take notes on the dates, times you've called etc.. Note everything! You're not satisfied, I'm not satisfied...no one is satisfied.

I do think the gray you have indicated looks better with the tile floor, had you chosen that originally. However, I don't think the existing carpet looks that bad. It is easy to focus on in an empty space. It is easy for you to focus on because you are second guessing your choice. I would not walk into that space upon visiting your home and think it was awful. It seems from your last post you are a typical person who wants to invest in a home and make good design choices, but like the rest of us, you do not have unlimited resources and are trying to allocate them. Is this your first home? There are a LOT of unforeseen expenses in the first year or so when buying a new home. I would live with the brown carpet for a while.

Here's some inspiration photos. Remove all the art from the walls and replace with something similar in the first photo but hung closer together. I would buy silk Asian themed colorful pillows. Maybe add a rug to anchor the set.Remove the plant from the room. Blue based lamps that won't work with the color scheme. Go with a gold tone or neutral /beige/white, to bring in some lightness. A large piece of art for the back wall. The table on that wall is too small it needs to be longer to full the space. You can also try the sitting arrangement with the chairs facing the coffee table on each side and pull out the couch from the wall some.

I don't care for area rugs of any kind. I like an uninterrupted vision on a floor. Just my preference. Plus if you have nice floors why cover them up. I did have 2 in my last house (that is were I found out I don't like them) , but they never creeped, slithered, wormed, lollygaged or crawled anywhere. They did fly though, out the front door when I found out I don't like area rugs. Find a nice pattern and enjoy. You might find out you like the W/W carpet in the basement if you live in a cold weather climate. The floor is so much warmer.