I know you were asking about the furniture arrangement, but have you considered painting the walls a lighter color? It seems dark to me. I do not think you need drapes unless you need privacy. As far as the blue lower part of your wall...do you have any other blue in the room? I would remove the little bench in front of the fireplace and the little floor lamp.....maybe find another place for them. Could you swap places with your couch and chairs? More open to get to the one set of sliding door and the couch would be sort of a room divider.

Awesome :) Thanks for your time & the advice!

It seems like you need the seating space. Are you able to put the leather sofa in another room? I think a leather sectional would be perfect for your family.

Why do you want the dining table in front of the TV? You stated this is your living room. Do you not have space for a dining room? Won't it block vision from the sofa? As far as wall decor, it may depend upon where the sofa goes. You could use two chairs, maybe swivel, to have in front or to the side of the sofa; they could be swiveled to watch TV or to have conversation with people on the sofa.