Personally I would paint all the wood trim a cream color but I know that's sacrilege for this style. I would, however, paint before you move in because it will be so much more difficult afterwards, especially with children. It's odd that the walls are pink and the fireplace yellowish, so that's something I would address first. I would next look for a large, gorgeous Oriental rug that would set the color scheme and go from there with drapes, furniture colors, etc. The rug that's there now is actually longer than it needs to be. The window treatments are odd, to say the least. You're so fortunate to have windows on several sides, which means you can go with lighter or darker wall colors without the living room turning into a cave. I would choose furniture that has classic lines, and not the overstuffed, lumpy shapes that you see so much in leather furniture especially. That look is going to be dated very soon, and in fact you will never see it in decorating magazines or on-line decorating sites. Furniture stores are often 5-10 years behind what's trendy, but classic styles never get dated, like a chesterfield sofa, or anything that has simple lines.

You needn't do much, replace the mantle with thick dark wood and place a beautiful outdoor scene with some blue in it close in color to your island base.

Honestly, I really don’t think it’s bad at all. The arches match the room entrances. The color is crisp and blends well with the kitchen. The only 2 things I would consider changing would be the brown tile and curate the photos and decor more for a less cluttered look. It’s a beautiful room.

Honestly, now that I see gold in your countertops, consider waiting to change out the surround. Do you see how they "talk" to each other? Add a large rug in gold and your wall color. Get a light beautiful artwork over the mantel in golds, and light colors. Add sofa pillows that echo the art work. Fill the firebox with birch logs with some logs on the hearth. That will look great for a long time until your budget allows for bigger changes. Going forward, make sure what ever you add already relates to your "givens," cabinets, flooring, countertops. Add light pillows, art in light frames or no frames. This will balance the browns you don't care for. Palette for large rug with current mantel and current countertops, wall, floor.