Here's something to consider... First, I would reverse the uses of the room, and put the living room furnishings on the end away from the kitchen, and the dining room where the living room is now. Then I would take the table and chairs out of the breakfast room and turn it into a music room, with the piano and perhaps a small game table there. With the dining room close to the kitchen, you could easily use it for your meals, rather than wasting space on a function you never use. And you could have coffee at the little table in the music room if you wanted to. Then I would not add anything structural to divide the space. Since you have those large windows on two walls, you lose the end wall for furniture. I would place the china cabinet on the long wall beside the door into what is now the breakfast room, and let it establish the line between the two. (Its size would fit better on the long wall.) I would hang a large rectangular mirror vertically over a small table directly opposite the cabinet, thereby establishing the feeling of a transition space. That way, you gain the use of the china cabinet in both areas, and make a clear delineation much more economically. I would arrange the living room furniture with the back of the sofa facing dining area, to establish the start of the living room and further divide the space, with a narrow console table behind it facing the dining area, which would give you room for a lamp, and add serving space when you need it. I think you would find that arrangement more comfortable than if you added architecture to a nice simple room, and lost space doing it. And I also think you would find the house lives better if you are using all of it every day. There is something rather forlorn about a functional space, sitting in the midst of your life at home, that never gets used. What gives a home life is...living in it! And that's my big idea! Let us know what you decide.

Thank you all for your suggestions! @Enduring I definitely can push the TV back on the stand. I don't think I have enough room to allow the back of the sofa to be a walk way. @Immcnitt I like the idea of a console table. I'll see about playing around with the layout over the next few days. I agree with the chair in the corner, it is a bit odd. I do think the layout is TOO open now and makes the table look far to small. Hmm. @Jamie Our ceilings are too high, would the new lighting need to be shorter? @Jamie I would love a new rug in the living room for sure. I hadn't thought about a rug in the dining room, maybe that would make that space feel so open now.

what do you mean by "right now"???

Candid! The first thing I saw in both rooms were the window treatments. The living room valances, although formal in design, are a dated look even for kitchens. The dining room drapes and swag should be framing the stage in a theater; they're just too heavy and dark. The red art in the dining room and the blue art in the living room are "off" elements in contrast to you furniture. The red ones might work in your kitchen, and the blue could theme another space. Dried floral arrangements and sticks as decor faded a long time ago. The living room rug should be as large as the one in the dining room. What to do... Here's a favorite house of mine and you have the furniture to pull off a similar look if you just simplify and get a larger rug and some side tables and a coffee table that are in scale with your other pieces. Click through the link with the photo to see other rooms in this lovely home. Brighten up your space by painting both rooms as below (believed to be Navajo White walls and White Dove Trim.) Consider wainscot for the dining room and a new chandelier. Updated window treatments that match in both rooms, larger rugs and less clutter would improve things. If you do paint, then removing all the tchotkes will happen anyway. Pack them up and only put them back judiciously.