To start I would swap the loveseat and the chairs. The loveseat should definitely be on the wall. You’re right it might be too small. What will this room be used for? So far I see two seating areas and it’s highly unlikely you’re gonna use two different seating areas that are not close enough to each other to use together.

So we have a family room in the basement, so this is definitely just for conversational sitting, no TV. But it will get used plenty just because it's so close to the kitchen- reading books together, playing games, etc. I have 2 little kids, so I was thinking about a slip covered sofa just for cleanliness. Good idea on switching the chairs and sofa, that makes sense. And that area by the windows will probably never get sat in, just not sure what to put there. Ideas? It has such a large area in front of it, that opens to the dining room, and it is just so much empty space!

How about shelves for books and toys under the front window. Little children love to have big open spaces to play in.

Yeah, you're sort of screwed by the doorway to the dining room -- there's no real way to set up the door side of the room as more than a sliver by the windows.

You're on the right track in treating it as two separate zones, though. Here are a couple ideas that might help you visualize the right solution for your family.

1) Treat the area near the door as a Kid Containment Zone. Put a bench where the entry table is, with baskets underneath for shoes, and maybe a couple of hooks for (future?) book bags and so forth. Then put a small table right next to the door, in front of the sidelight, as your entry table, with a bowl for keys or mail or whatever (and a drawer for mittens). Reading chair and lamp in corner by dining room, to look inviting for a pause, might never get used, or could have a small bookcase for kids when they need a moment to themselves.

2) Make that zone a gaming area, with a smaller table against the windows and 2-3 chairs. Floor lamp in corner for evening activities. A puzzle could live there, or it could be the go-to space for games. Or you could instead do a lower crafts table and a storage cabinet. (You might have those kinds of spaces elsewhere in the house.)

3) No matter what you do with that zone, I'd enlarge the living area in both dimensions. Couch against the wall with chairs on kitchen side, table and lamp between chairs, large coffee table (think a big circle!) that can double as together-activities zone. Use a big area rug to anchor and define this area, and let it come down very close to the hallway to the bedrooms. This will help you scale your furniture and help eat into the dead zone. If you entertain, you might add another arm chair on the doorway side of the ensemble, or use an L-shaped couch, to encompass more seating and enclose more space.

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HOpe this helps!

Here is a layout that would work

following

If you had switched the door with the window, you would have had enough space against that closet wall to enclose a small "pocket" office.

Seems like a lot of waste space for circulation.

Something like this:

chispa- yea unfortunately moving exterior doors and windows is a pretty big structural thing, so we have to work with what's already there. We did consider walling off the dining room, just so the space would be more usable, but then the dining area might feel too closed in. Wondering if a stand alone rug in the empty space would make it better or worse?

BeverlyFLADeziner - I like the layout, but maybe flipped. We don't need a TV in that area. Any idea what to do in that big open space?

Following

Can you get 2 more of those chairs and a hassock or table for the entry area? Area rugs will warm things up a lot.

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