Yes, another option is to only use one of my leather chairs and have an "everyday" arrangement and then pull up extra seating when necessary. So, this would seat 4-5. And then I'd pull up the extra rattan chair and the two ottomans to seat 8. Or does it seem unbalanced having the larger leather chair and the smaller rattan chair flanking the fireplace?

I don't see how putting a sofa facing the DR and the TV on the wall segment between them allows for decent viewing. I see your two options as (1) putting the TV in the corner (not necessarily on the diagonal -- a 65" TV is generally a little less than 60" wide -- doesn't leave a lot of space, but it can be placed flat) or (2) putting the TV on the wall between the window and the DR and floating a sofa opposite the TV and in front of the stairwell wall with a walkway behind it. I would probably use a sofa or sectional facing the sliders with the TV in the corner and a console or sofa table along the back of the sofa to give a landing spot for the DR and a transition between the rooms (most sofa backs just aren't that special base for a reading lamp too). You say you lean contemporary and the space in that corner is limited, so I would consider a non-traditional option for the TV console. This one is a lot less bulky than a traditional cabinet. It could place the TV flat or angled a bit without being obtrusive. We have a FR with an open end and lots of doors and windows like yours and the only real solution for us was to put the TV in the corner. We had a cabinet for a long time and more recently got the easel (ours is the black, which is a stain so you see grain and it comes off more charcoal than heavy black like a painted finish would be). I am so much happier with it. The components all sit on the bottom, we got charcoal grey flannel baskets for the rest of the shelf space and a cord storage box to contain the power strip, plugs and help control the cords. Once you get decide on the TV and sofa placement, the rest will fall into place.

If some changes could be made to the interior, especially the kitchen, it might help woth furniture arrangement. Unfortunately, what I’m thinking would probably be undesirable for resale and hard-to-impossible to move furniture beyond the living room, but here it is anyway: Extend the island to one of exterior walls. On one side, it would force you to walk through the kitchen to go upstairs (what’s up there, by the way?). But, you could do this by simply placing a rolling island between the island and the wall. It keeps that from being a walkway, but is easily moved when desired. Or, on the other side, it would have you walking through the kitchen to get to the back bedroom, and the refrigerator would face the back hall. Anyway, either of these takes a walkway out of the living room, potentially allowing for furniture placement.

Turn your sofa to face the TV/fireplace. You may not have any space between the wall and arm of your sofa. Maybe get a narrow table for behind the sofa for lamps. If you get a new sofa, don't do crazy oversized -- 84" is plenty long (I bought a 3-seater that's less than 72"!). Place your loveseat where they had theirs, next to the sliding doors. You now have L-seating great for conversations, and TV. I would suggest a sofa or loveseat with 2 chairs or one larger chair & ottoman if you purchase new instead of a sofa AND loveseat. And don't buy a sectional! If you could get dimensions of the space and your furniture, and photos of your furniture, that would be helpful. Their set-up looked great, though I don't understand the sofa placement unless sizing was an issue.