From your description, I'm not clear on the layout at all...when you say put the tv in the small back room are you talking about the area in this room by the sliding doors? A sketch of the room with dimensions would be helpful, esp for you as you try to lay out furniture and need to decide what fits and what doesn't. I know you said you want a more formal area for when you host guests, but I think, given the toddler, you should start with function first. IMO, a house should give the most space to the maximum utilization. So if you will be needing play space and tv space which will be used on a daily basis, then that should take priority over a formal seating area which may be used less frequently. Rather, there are ways of combining both functions...keeping a play area with toy storage, perhaps by the slider and then incorporating seating and family TV time and entertaining around the fireplace. Regarding the windows, I would suggest that you treat the lower windows as you wish and ignore the upper windows. The vaulting in the ceiling has some odd shapes and some of the window placement is awkward, so I would ignore them ... pretend there is line going around the room where the lower ceiling is and don't decorate above it.

I have a similar angled fireplace. If you're not wedded to the TV over the fireplace, I would suggest putting it next to the fireplace and angling your furniture around the TV. That's the way mine is. You can see the TV face on from some pieces of furniture, and the fireplace face on from others, but all can see the TV and fireplace. I use my fireplace daily in the winter so don't want a TV over it, it gets too hot up there. I would advice against a sectional. You can get the utility of a sectional from a couch and a lounge chair or two. I'd be more apt to angle the couch where the chairs are in your picture. A floor drawing would probably help with furniture placement. I think you could totally redo the room to match your inspiration picture, keeping the wall color unless you really want a dramatic change. I love the curtains in the inspiration photo! Your house is open concept like mine. Hard to figure out whether to repaint or not, because once you start with one room, it snowballs to how that affects the other rooms. You could always do one wall another color like the current owners have in the photo. Wish I knew what that color was in your inspiration photo. Browns and tans are the worst for me as far as choosing the right one. I burned up a lot of cash in sample paints when I moved into my new house. But it is the right time to repaint, before you move all the furniture in . . .

Put the TV on the ledge next to the fireplace. That should put the center of the TV screen on eye level with a seated watcher. Place the recliners facing the TV/fireplace, and put an end table between them. Treat the small space as a separate room. A chaise could make it a good place to lay back and read.

So I would have you cable outlet moved so you can put you tv in that corner area by the bathroom. Either put the tv on an articulating arm that you can pull out and turn toward the seating area or just angle the tv in the corner. To me, built-ins would be the way to go vs a tv stand/console. I also created another seating area which l linked together by doing a “wall” of drapery panels. With the sectional on the long wall, it gives you a nice focal point as you enter the home.