Back in the 1920s, built-ins (such as built-in desks) were HUGELY popular. These items were called "Permanent Furniture," and it was thought that this permanent furniture would ease the financial burdens of buying a home. Plus, in the midst of The Bungalow Craze, built-ins addressed the problem of limited space. In the early 1900s, we abandoned the Victorian manses in favor of the bungalow, because of the newly discovered Germ Theory. And yet, those bungalows were pretty small. Here are some pictures from a 1927 Builders Woodwork catalog. Here is a link that might be useful: Permanent Furniture

This reminds me of our great room furniture. Our big pieces are generally neutral and I add color with pillows, rugs, etc. Our sofa is a bit lighter than the fabric you show and is a textured with small flecks, but reads off-white. There is a flax colored linen chair near the fireplace (a bit darker than the sofa) and then "my chair" is almost tone on tone, a diamond type design. I've lately seen rugs with the same pattern. The background is off-white and the diamonds are a few shades darker. Doesn't read quite solid, but very subtle. We also have a dark brown leather chair in the room with wood floors and several antique wood pieces in warm wood tones. Although I have stuck with our shades of aqua/turquoise/blue/green accent colors; I love the neutral bigger pieces and the fact that if I wanted, I could easily change my color scheme with my accent pieces. One thing that helps is the sofa and diamond patterned chair are textured, which gives some interest. Love the sofa and can't wait to see what you decide for the chair!

Assuming this is a short term rental. Do you have a TV over the FP or somewhere? I have a large family and we vacation together and often get a Short Term Rental house or duplex rather than hotel rooms. There is some time during the day that someone wants to watch a bit of TV or we need the kids occupied while the adults are getting things ready for the day/evening activity or just to wind down. When your used to traveling as a large group you don't always expect that the accommodations work for every situation. Sleeps 6 (+ a kid or 3) Need room for 6 to sit, but it doesn't need to be a 6 seat sofa or 3 person sofa and 3 chairs. I would probably add a chair with an ottoman - if needed someone can sit on the ottoman. If you can fit another small arm chair great, if not don't overcrowd. If you can tuck some folding chairs somewhere that people can see them they will make use of them. Something sturdy with nice padding like these: https://www.amazon.com/dp/B00EQ1TEKQ/?&tag=vurnicom-20 (Maybe hang them under the stairs) You could also look for a corner to place stacking chairs, but someone is bound to sit on top of the stack. https://www.amazon.com/Flash-Furniture-HERCULES-Stacking-Burgundy/dp/B002NS0ZQQ You may also want to consider nesting tables on one side of the sofa - if people sitting on the folding chairs want to put a drink down they have a small table. If you are replacing the counter I would make the bar area counter height (looks like it is bar height now, but the ring photo is a bit distorted. I would add bucket seat counter stools something like this. https://tableschairsbarstools.com/bar-stools/counter-height-bar-stools/contemporary-bucket-seat-stool-with-cut-out-back-on-counter-height-base-from-regal-seating/

What do you currently own and choose to sit on? Do you like to lay down while watching TV? Do you want to have your feet up? How many people normally sit in the room? How many when you have guests? Do you want to cuddle with someone? Do you have difficulty getting up from a seated position? Do you do sewing, crafts or puzzles while watching TV? Choosing furniture that is going to function well for the way you live requires knowledge about how you will use the room and your personal preferences. Size also matters. My mom was 5'2" and my dad was 6'4". They never liked the same seating. Recliners are probably the most frowned upon option per designers, but many people love the comfort. Some also need to put their feet up. Many don't like a chaise lounge, but my sister and her husband have a sofa with a chaise and use it every day - her laying across the sofa and him on the chaise. They have 2 chairs but choose the chaise sofa. I love my sectional, but that is what works for me in my space. Only you can define this.