Tara, your dilemma kept digging at me. I happen to be shopping for furniture for my living room right now, and it is also a challenge - completely different challenge, but difficult all the same. I have been looking at Stressless furniture and one of the photos that they have on their website doesn't have a sofa - just chairs. It is a very modern look, and today, as decoenthusiast pointed out - people don't really like to sit close together. Then I thought about the home I grew up in. We had a family room with a door, then a sofa then a recliner on one wall and across from the door was a big round table where we ate most of our meals. Next to the table was the TV and then my mom's desk. The 3rd wall was all bookshelves with cabinet lowers. My mom and my aunt usually sat next to each other on the sofa, my dad sat in the recliner and the kids sat at the table or laid on the floor to watch tv. We had 6 kids. It worked. The is what I came up with I used a free app from a furniture store on the internet, so colors weren't options and some of the choices were limited, (Why you have a mirror instead of a TV) but I think you could do something like this - maybe two storage hassocks in the corner so that someone in a club chair could use one to prop their feet up. Pillow and blanket could be stowed in each for the kids to use to lay on the floor.

I like the overall feel of the space I agree drapes and much fuller would be nice .I do not like the wall color or the art if getting rid of the gray is the point then get some art with a bit of green it it and something you love to look at . The light does nothing for thstspace the drum shade is okay better than wht you have Ilove this color for walls it is a total neutral for me I cut it 50% if a hint of colar is all you need and before choosing the wall color Get the art and drapes in a color you love then match the paint to the drpe s. I like faux silk for drapes at lest 2.5 times the width of the rod for sure. I then woudl choose fewer pillows in colors from the new art , just think if you need to move pillows to sit you have too many. A rug would be agreat addition again in a color from the art so maybe just a darker shade of a color from ther e.

Start by making the t v wall more important. Using the wall paint color, paint a wider (wider the better) console with it. Inspiration photo. Add some (real) greenery, put in a wicker plant stand to work with the accent color in the rug. Scout around for LED battery powered wall sconces in brushed brass. Move the rug and the sectional a bit more to the right so you have more of a path by the window to get in and out of the room. Good place for tripod floor lamp. You can make this off-side work if you center the new console on the wall, but install the t v more to the right of the wall so it aligns with the center of the sectional. This is where you hang the artwork. Like this: This is a gallery set of art prints that you can download for $10.00, from etsy, and frame yourself, I'd stick with gold/soft brass framing to compliment brass sconces. https://www.etsy.com/listing/1630091776/neutral-coastal-vintage-landscapes-and?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=gallery+wall+art+set&ref=sc_gallery-1-1&pro=1&dd=1&plkey=2d1e9a12e4474b9cdbe1e05cbf4b8d85437711b1%3A1630091776 As for the window, purchase a lined panel, thinking white with a blue trim. This example of the install will work well. Notice how the rod is hung higher and wider than the window. In your room, you would stack back the panel to the right of the window. Again etsy for the panel. Except you want a brushed brass rodl

Your real estate paperwork should have blueprints and measurements of all the rooms, no? Your furniture seems too big for the space you have. Ideally, you could float your sofa where the chairs are, float the chairs to face the sofa, and move the TV to left of fireplace. However, you don't really have a way to get through the living room. Any chance you could return the sofa for two more chairs? This is what's often advised in such small spaces. Paint the entire space a warm white that works with the floors. Get your blues and mustard in there with art work and rugs. You've already made a start. Jan offered a good suggestion to swap the middle space--current dining room--for living room. If you have an attractive eating space in the kitchen--do you?--then a beautiful round table or a long retangular table with casual but upholstered armchairs (less formal than these) could be very inviting as you walk in. Then no problem with walkways. Do a Google search for "switch living room and dining room." Lots of great photos as examples and how to do it. Here's a photo of a front door that opens into dining space. The chest and mirror by the door gives the sense of an entryway along with the hooks.