So you want to use the living room for children's play, TV watching, piano playing and entertaining guests? That's a lot of function for a small room. I'm wondering, do you have a dining room and what do you use it for? If you have a dining room, but mostly eat in the kitchen, you could easily turn the dining room into a piano room and play room for the next couple of years, until the kids don't need a play room anymore. Then you could have a living room with furniture that can float away from the walls. You could have adequate seating for guests, without cramming toys and a piano in there. Your options would be greatly expanded. Maybe you don't have an eat-in kitchen and this idea simply wouldn't work in your house. But it just seems to me that you are trying to fit so many different functions into this one room, and if there's any place in the house you can move one or two functions, you would have a much easier time decorating this room. Don't lock yourself into what the name of the room is; look at each space in your house in terms of what functions it can best support.

Paint fireplace white or the same color as the walls, remove bookcase that is on the right side of the fireplace. Get a corner TV console for the left side of the fireplace....maybe tv will partially cover the window, but that is okay. Get some pretty artwork for over the fireplace and take the colors from that for pillows for your couch and a rug if you want. An ottoman or upholstered bench in front of your couch to be used for extra seating when you have company.......should be on rollers, easy to maneuver. Where the shelf unit is now, get a tall green plant..nothing else. If room, I think your chair and a small table will be good by the stairs. At the bottom of the stairs you could put a decorative shelf or console with drawers under the window...facing up the stairs. with a small viney plant on it. Oh, yes, I would pull your couch back as far as you can...without interfering with the door. To bad the door does not open the other way. Have fun rearranging. I do approve of your curtains...white sheers but they should be twice as full as they are now and the door curtain should match.

Thanks so much everyone! Not sure why we placed the chair on the right of the fireplace. I guess for it to feel closed in and a little cozier. I'll definitely move it back to the left! Currently this is the existing furniture that we have, but we're going to wait until our toddler is a little older before investing in better items (chairs and couch). Our dining space is slighting behind and to the right of the couch, so I'm trying to get a sense of what will work in the space decor and furniture wise. Would you recommend putting any art or floating shelves on the wall, to the left of the fireplace? Thanks so much again!! Great feedback!

The living furniture seems to be confined to some invisible boundary! Turn the area rug 90 degrees and spread the furniture out a bit. Add another chair at the closest end, which will fill some more of the empty space. Once you change the floors I would move the chandelier further up the ceiling, again to give your dining furniture a bit more breathing room.