Sheer curtains for the windows. Layout will be tricky because of the FP and the heater/ radiator. I think we’re looking at a couch on the wall with that radiator. Maybe a console behind it to block the box. Or a couch lengthwise. Facing the door. A rug, coffee table, maybe a bench or some chairs. Start with what you can. Very charming home. Love it

I vote for the middle drawing except instead of two sofas back to back, put two chairs up against the windows with a table in between which creates a small conversation area. If your family is into games or puzzles maybe you could expand that seating area. I don't like the idea of a sectional that would have part of its back toward the fireplace. As for the chaise in front of the fireplace, it's worth a try if you're really excited about it. I would want to be able to return it or use it in another room if I didn't like it there. Sometimes you don't know if you're going to like something until you try it. Hard no for me always on putting the TV over the fireplace. I guess some people are fine with it, but it's not for me and you will find the majority opinion on this forum will run against it. If you don't have anywhere else to put it, it's fine, but you do have another option.

The amount of seating and placement is not doing your room any favors. Maybe try your settee under window, remove all the items in corner and place one of the matching tables there with a lamp. Place matching chairs facing settee with the second matching table between them and add a coffee table. With wanting to keep chair/ottoman, could you move the curio to the right a bit and place where dining chair is. Ignore the extra two chairs in picture and with your credenza (vs fireplace) it would feel similar to this room.

Reconsider the tv over the fireplace. it seems like a good idea until you sit down to watch. The large sectionals dont really seat more people - they are just trendy past few years. whatever you do get some taller table lamps. its a wonderful space