Unless you provide heat to the room or leave the door to the house open, it will stay cold in winter. And no matter what you do to the walls, there will be a lot of cold coming from the floor, which looks like concrete directly on the soil. Short of tearing it down and starting over, remove all the mouldy messy fiberglass, caulk and polyurethane foam the gaps in what you have, fill with tightly fitted polystyrene (expanded or extruded) and cover with plywood or drywall.

The rug is nice and goes well with the art work which is your starting point. I would suggest to buy the furniture first (if you haven’t already) then buy the rug. Furniture is the most expensive investment in a room so it’s always good to plan for it first then go from there. This will help you in two ways.....1) Furniture layout in a room will help you decide on the correct size for a rug.... 2)If you are planning to add accent chairs in the mix then you are not limited with the style/color of the rug. Hope this helps.

Per Flo’s suggestion, it does seem very functional to put the sofa in front of the window . I always hesitated, though to put a sofa in front of a window, As far as far as practicality and making The most of the space, though, this does seem to make sense, specially with the fireplace ( not easily moved), being a given. It does look like a portable fireplace but it’s not. There’s an opening and vent to the exterior of the home, it’s not a ventless fireplace. It’s listed as gas But the home inspection , within days, will clarify that.

It's gigantic. I'd be trying like hell to avoid that. I'd use the dining table in the dining room for a combo desk /office. I'd buy more flexibility.......comfortable flexibility. A tv can mount flat to the wall, With an IR repaeater, it needs no console beneath. The cable box can go anywhere. I'd get a nice deep and comfy 84 inch sofa, put a console with lamps behind. Add two super comfy chairs and ottomans. A nice generous, light and open cocktail table. Lie down! watch the tube! Put your feet up! Add a little ottoman for a perch at the cocktail table. People love to sit and reach a snack. Add a low table between the chairs at the fire......open and light. Ten x 14 rug to ground everything. ( dotted line ) Go set yourself up in the dining room, to work, and just clean up when you have guests !! No matter the sprawl, no more than three folks will ever sit on that beast of a sectional : ) Two chairs and a total of three ottoman plus at least two on a sofa............for gatherings gives you seven seats. A smashing piece of art over the fire too.