Are those bookshelves? no fireplace in the room? Rather than a sectional, I'd get two sofas. One would have its back to the DR entry, facing the long bank of windows. The second would form and "L" with the other sofa and would be facing the bookshelves, back to the wall with the hallway entrance. Square table in the elbow joint the two sofas make; large square coffee table; TV on a wall-mounted articulating arm on the wall where you have the bookshelves, in the corner by the windows. You can then pull the TV out and angle it when you want to watch it, push it back against the wall when you don't, and any glare from the windows won't hit the TV.

I'm glad you're thinking about room layout at this point. I'm seeing a major issue with viewing the TV from the dining room if the layout is as you suggest. In order for that to happen, the TV would have to be parked in front of one of the windows which is not optimum. If that was really a critical element, then perhaps you can put a separate TV in the dining room. The beautiful new windows will be too nice to obstruct with a TV and TVs still are easier to view without a lot of daylight around them. Beyond that, it's really putting function first... including the flexibility of having the room grow and change over time with the family wants and needs. With 3 little kids right now, I can see using the furniture arrangement to make a defined play space that would be separate and apart from the conversational cluster which may or may not be centered on the TV. I wouldn't worry at this point about designing the room for when your kids are adults...that's a little far afield...make it work for your needs today.

I agree with moving in and considering for a time, but here is something to consider while you're doing that: What drove this idea is the first room you enter into from the front door doesn't seem suited to anything but being a dining room. As a living room, it's odd that it's so small compared to the other living spaces, and, as you already said, there's no good wall for the TV. You also wouldn't want that room to be a kitchen for many, many reasons. However, that room would be a perfectly functional, reasonably-sized, not-weird-seeming dining room. If that room is a dining room, that also means the nook under the stairs would be a very logical area for a buffet. If that first room when you enter is the dining room, then the next room on your way into the house should be the kitchen because you want your kitchen and dining room handy to each other. As it happens, the current-dining-room-suggested-kitchen space is large enough and offset enough from the current-living-room-suggested-dining-room that it would be possible to funnel all traffic past the kitchen rather than through it. So your work zones in the kitchen won't be inundated with unwanted visitors. Furthermore, this suggested location for the kitchen is still handy to the back deck for outdoor eating. If those first two rooms become the dining and kitchen, then that leaves the current kitchen space to become the living room. It's a little unorthodox to have the living room as the room farthest from the front door, but it actually makes a lot of sense for this house. The other two rooms really do lend themselves to being the dining room and kitchen, and the current kitchen space is a good size for a living room and has two walls that could be the TV wall. It's also handier to the back deck/yard than the current living room, which I think will actually be a real upgrade. With the exception of shortening the two dining room windows (which isn't a structural change) so they're above counter height, none of the above requires any changes to any of the walls at all. That's nice because I think you'd get the most out of your space if you do bite the bullet and move some walls in the left half of the floor plan. The way it's currently laid out really, REALLY isn't as good as it could be. Since you don't have a guest bedroom downstairs, you don't need a full bath downstairs. You just need a half bath, and the shower space could be allotted to something else that would be more useful. Furthermore, you also don't really need deck access from the left side of the house, and having that deck access means unnecessarily losing a lot of space to a long hallway. On top of that, you have such an odd, circuitous entrance to the master bedroom that is (a) weird, and (b) means unnecessarily losing even more space to walkways. And lastly, there's a couple chopped up, not-optimally-shaped closets. Moving walls around quite freely in that general area, I was able to fit in a large master bath, a large master walk-in closet, a dedicated laundry room (that is accessible off a hallway, placed where the dryer can vent directly outside, is handy to your room, and yet is still far enough from the room that you won't be hearing the machines while you're trying to sleep), and a bonus hallway closet. Note that I shifted the doorway to the hallway from the current-dining-room-suggested-kitchen slightly so that you couldn't really see either the half bath or the master bedroom from the living areas.

Where to put TV? Left of the FP it will be in a traffic path to the dining room and will pick up glare from the windows. At the other end of the space, you could float a sofa perp to the FP and windows, facing the 10' wall where you hang the TV on an articulated arm. Use a pair of swivel chairs to make an "L" with the sofa, their backs to the 5' wall by the windows. Then behind the sofa you add a game table and chairs out in front of the FP. The other major seating are focuses on the windows. Perhaps more swivel chairs in a grouping around a hassock or coffee table. You could also do two chairs facing the view and use a backless settee at the window. What kind of views do you have from the kitchen? I'd seriously want to open that 7.5' wall so I could see the view from there.