First I have to ask, how committed are you to keeping the big giant blow up bouncy houses in your living space? There is just no hiding them or disguising them. So if you really want to keep both of them, you will always have a room that screams toy haven. Is there a spare bedroom where you can keep the larger one? Or reserve it for use outside? I think the front room will work really well as a child's play area. Using creative storage, covered baskets or even cubes on your white book case can help conceal some toys. Since you are facing into the living room when entering from the front door, if the room with the fireplace is arranged in a cozy manner, that will be the first thing you see. Is there any way you can put the couch beneath the window, and the TV next to the fireplace where the white chair is? This way when people walk in they don't see the back of the couch and the TV facing them. Maybe you can move the chair to the corner of the play room, with a small storage cube ottoman in front to hold toys. I agree, I think your dining area should stay close to the kitchen in the blue room. Otherwise it will be completely impractical when serving dinner or having guests over for a meal.

What is the depth of the couch? The length, width and height of the side tables? Ditto for the arm chair, the size and shape of the ottoman, the height and width of the entertainment center. Is there a desk chair? What is the width of the desk? Does it have an opening in the middle or on the right or left side? Is the back of the desk finished? Right now, making guesses, I can't fit everything into the space unless you don't want to get into the dining room, kitchen or hallway :-( It's not the lack of wall space; it's the lack of space for all your furniture.

Suggest you "split" the LR into two areas. An intimate cozy conversation area in front of the fireplace and a TV area at the window end. Your biggest issue will be TV placement as your windows will cause glare on the screen...unless you place the unit in front of the windows.

This is a close up of a tweedy type rug that might work for you - I just think a darker rug will cozy up the area and complement the ottoman so much better.... This rug has been discontinued and the remaining sizes are probably too big for your space, but it might be a direction to be looking, if it appeals to you: Something like this might work, too. I can't tell for sure about the colors but Pottery Barn has samples available in store if there is one near you, refundable deposit when returned: