Have you looked online for used furniture? Sometimes people sell for reasons of color, style, etc, and therefore sell lightly used pieces for a fraction of the price new. That said, for a new $1K sectional, you should look at Macy's or Jennifer Convertibles.

Your home is amazing. Those windows alone ... We have a sofa and two chairs in our living room and a sectional with an ottoman in the tv room. The sectional is large and we can all fit comfortably (with the ottoman). The sofa can fit two (it is a big sofa but doesn't have an ottoman). Have you ever sat on a loveseat without arms? We used to have one and we found it so uncomfortable. You couldn't lounge - always had to sit upright. I love the look of the sofa and loveseat you've chosen, but you say you want comfy and they just don't look comfy to me. Have you tried Lee Ind. for sectionals? They make clean lined mid sized. If you see one you like but it doesn't look like it comes as a sectional, check with a dealer. We found that they could be customized to pretty much what ever we wanted.

@lori yep very easy to keep clean. One of the main reasons for not letting it go. @tatts thank you for the observation on lighting. In terms of the lighting. My camera does a pretty bad job and likely makes it worse. We usually use low level lighting and plan for lighting within the tv unit that will brighten things up. But for now we would like to focus on sofa, cushion and curtains. The dark sofa really makes things look darker than we want. Once that’s done and the lighting done we will revisit the room light8ng. I like a standing arched lamp though( rather than table lamps. )

A 3-seat sofa and two comfy upholstered armchairs are your best bet for comfort and flexibility. Second option would be a reversible chaise sofa and one chair. The chaise that flips from right to left will give you many more options for arranging the room. Cornering furniture eats floor space, and says you don't really have room for your stuff. I would eliminate the cornered armoire or place it where it can lie flat against the wall. Maybe it would be useful in one of the kids' empty bedrooms. That will open the possibility of some window treatments that will soften and cozy the space.