I like number one and two and feel TV viewing would be better than for number 3 for most people. It probably depends on furniture arrangement. With kids, the TV will get used more often and having it on a swing arm would bother me. I think if you prefer number 2, go for it. My daughter moved into a home with an offset fireplace (like further on the left side of the wall) and she put the TV on the right with a TV console underneath. She did a very large screen TV and she has a sectional on the right side backing up to the window and also facing the TV. She also has a couple chairs looking towards the TV, fireplace and window. She has beautiful windows with a nice view behind the sofa. That is what most people notice. Take your floorplan with you to furniture stores to look at sofas and chairs. A designer may be able to help you with layout for furniture and give you a clue to where the TV would work best with your furniture. That worked for my daughter.

I’d build a room over that great room in a heartbeat. Have you ever lived in a house with a two-story room like that? They are a pain in the ass to decorate and they screw up the heating and cooling of not only that room, but the upstairs, too. As for the fireplace placement, I’d move it to the side wall, like you’ve shown in your photoshopped pics, regardless of whether or not I was keeping it as a two-story room. :) Edit: Actually, I forgot to take the size of the tv into account when I made my earlier recommendation. A 70” tv might dwarf the fireplace over which it’s placed, but I think I’m definitely against the drawing you have with the tv between the windows; I’d probably put it on the short wall where you can see it from the kitchen AND so it’s not the first thing you see when you walk in the front door!

But to your point grapefruit, if the tv was in the bar area, the seating would be awkward for a family of 5. That’s why I’m looking for a solution that can add more comfortable seating for tv watching and possibly replacing current furniture with a sectional.

When the sofa faces the window, the chaise completely blocks the fireplace and looks like a fire hazard. Since you're open to some construction, you may want to consider removing the mantle, adding brick up to the ceiling, then mounting the TV lower than where the mantle is now so it's more comfortable to watch when the sofa is facing the fireplace. If you remove the radiator in the dining table area, will you also be able to remove the 27" and 24" wide wall bump outs on each side? If you can, you'll gain valuable space and may be able to use the table and chairs you have now.