I don't know your decor style, but a large folding screen could be placed against the wall in the living area to differentiate that area from the other area. A carpenter can build you one for not much money. It can be painted, embellished with molding or covered with fabric or wallpaper, any of which could give the effect of a different wall treatment. Another idea would be to mount multiple bookcases or shallow shelves of some sort against the wall in the living area. The backs of bookcases can be treated similarly to folding screen to provide a different color, texture and/or pattern to the area. It's a bit hard to make suggestions without seeing the room, though, so if you could post pictures, that would be helpful.

I'd try and focus the seating around the fireplace and leave a path between the kitchen and french doors, to get to whatever is out there. Then I'd put a desk or bookshelves and a chair in the corner under the bar, for perusing my cookbooks, going online while someone was watching TV, doing homework, paying bills, household management, etc. I would try and keep whatever I was trying to do in there out of the path between the kitchen and doorway. That way the spaces will feel more focused, intimate and cozy. On the other hand, if that set-up works for you, then I honestly don't think it is that bad. Just keep on the lookout for art pieces you like and you can gradually deck it out more. Curtains would add an additional layer of cozy. An area rug with a nice pattern in front of the fireplace would "tie the room together." I got a nice wool oriental rug on sale and put it over my living room carpet that was the same color as yours, added an instant feeling of being more than a "pass through" room, which it tended to be also, due to the layout of my house, you had to walk through the middle of the living room to get to the rest of the house. The only downside of putting an area rug over carpet is they tend to shift, but perhaps there are strategies for solving that problem.

I'd read the thread before, but couldn't think of an improvement on jakuval's suggestions--I really like the one with the peninsula. That narrow hallway must be a pain, although I understand your space restrictions. I have a 30" opening from the LR to the kitchen, and I thought that was bad. Don't know if this will be real help, but the only alternate plan I thought of is to keep the plumbing on the right wall (I have the plan turned 90°) and pull the bases forward to accommodate the pipe. That would allow you to have a standard depth fridge, and give you more counter depth. You could also have deeper uppers (15-18") for more storage. I put a pull-out pantry beside the fridge, and 15" deep cabinets on the island. I was thinking you could use those for extra pantry storage by mounting shelves on the doors, to make canned goods easily accessible. I added a 15" overhang for seating, but it could be more shallow as your space is limited. With entries to the kitchen on both sides of the island, maybe traffic flow will be improved. I used the 30" range, which is out of the way of traffic, except when someone is coming in from the terrace, but there is space to pass behind the cook. If the window is lower than counter height, the small cabinet on the end can be installed at standard depth, and it could house the MW drawer--or the MW could be incorporated into the upper cabinet beside the fridge. The shelf might need to be the same depth as the fridge box, to accommodate the pipe. I added a shallow cabinet in the corner, just inside the door. That could be a broom closet, command center for a message board and calendar, charging station, or extra pantry storage. Thanks, jakuval, for the templates.

Placing a couch centered on the fireplace is going to leave little room to walk thru that area....but maybe that's ok... I really don't know. Unless you replace your current furniture with new pieces that are about the same size, and in the same place, you may be changing the traffic paths in the room. That's why, once you have an idea of what you want, you should move your existing furniture to the way it will be in the future, so that you will know whether you like the new arrangement, before you commit. 30 feet is long, but 13 feet is not really a narrow space for a living room. It's pretty normal. My guess is that your house originally had 2 rooms side by side in that space. If you think the space is tight, look for chairs and sofas that are not as deep, back to front. There can be a big difference. Your brown recliner is very deep. Apartment style furniture can be just as comfortable. Having a foot of padding at the back of a chair doesn't really make it more comfortable - it's just a style. You don't sink back a foot when you sit down. Here is my mock up of where the traffic path would be if you have a U shaped conversation area in front of the fireplace and TV. I gave you an ottoman instead of a coffee table in front of the sofa. And I made the upholstered furniture about 4 feet deep.