If you can post a measured floor plan plus pictures of the space, it would be easier to help.

I like the fireplace as is, and a warm white on the walls would enhance fireplace and all of the wood.. I would go warmer than this. Benjamin Moore’s Ballet White or Swiss Coffee could be possibilities. I like BM’s Natura Line. As far as furniture placement, I think 2 seating areas. One option, instead of sofa, etc. could be a center cocktail table or ottoman with four chairs. Or if you would rather have a sofa arrangement. I would put a small scaled sofa on the wall facing windows. Small scaled sofa would go where black marker is in this view. w/ rug: https://www.roomvo.com/share/o0am4r And sofa could possibly be larger; it is difficult to estimate available space there. so I am saying small scaled to be on the safe side. And if there is to be a tv in the space, I would place it on long, low console in front of windows. Additional seating by fireplace, but I have not yet figured out what would be best there. A chair or two, I think. Perhaps a chaise.

I’d try to continue enjoying fireplace, watching TV witth two areas, but with the objective of not splitting room. I would rearrange fireplace area (new furniture if possible to suit leather and in this set up, swivel chairs aren't needed). Leave space on right open and could warm up/ground with a rug. Not sure if space allows, but should be easy to figure out. More comfy chairs than above. On TV side, try moving the recliner, again to open up the room. Thinking couch could go under window and two chairs along the back wall. Suggest large art and a coffee table to create a more cozy space.

I love elcieg's suggestions. (I always do!) If your husband doesn't want to go with Gray Owl because he likes creamy, BM Ballet White feels warm and creamy but is less yellowy/more neutral than true cream; we painted Ballet White over old cream paint and before we got a second coat on, the cream peeking through looked positively orange. Ballet White is light enough to brighten the space while still providing some contrast with your trim. I do like the Gray Owl, though! I'm so glad you're painting the paneling. Your pre-gutted kitchen cabinets are giving me flashbacks to my childhood, when the pitfall of 70s decorating was oppressive darkness. The bones of your house are great and with a light color scheme like the one elcieg suggested, it's going to be fabulous.