Is your budget range for changing the pillows, new furniture, moving walls, or ?

The space is not the issue,

1. try floating the chairs and the ottoman in the center of the room, one may end up slightly angled into that window area.

2. I like the rug but I think it is too larger and its making the room feel smaller

3.not sure whats going on with all the little cabinets, but I would sell those and invest in one long one for the tv and some end tables.

apple - just looking for rearranging/design advice now, may get new furniture eventually but probably not now. Walls are not coming down.

For rearranging, mark the traffic paths on the floor with blue tape. Then move the chairs closer to the tv and with some view out the window. You may need a second table and lamp. The window space is lovely.

I would build out your bay window for seating and make it a focal point of your room. You can do open seating or have it as a dining space if needed. A simple bench near the bay would cost ~ $200 in wood costs. If you don't want to do a built out just try and make this your focal point. Much better place to read a book then the corner of your room with the couches.

Try pulling the chairs out of the corner so we can see how that looks.

You don't want your furniture hugging the walls like kids at a junior high dance. Pull the chairs out like RL said. The vanity cabinet does not work, you might find a new place for it like for storage in laundry room. What do you keep in there that you must have in the room? Could a storage bench in the window area hold those things?

I could move the blue cabinet I'm not attached to it. The bathroom vanity by the tv just ignore...
Here's an update, I'm still not loving it :(

more forward please, this looks really good FYI. if you pull them just a little more forward and angle them to line up with the bay window angle on the right, put the blue table in the bay window area . please remove the sink and put the laddar behind the chairs.

When you move the blue cabinet, try the table lamp on it. A floor lamp in the corner where the chairs were. You can look at yard sales or thrift shops.

Better? I pulled the chairs forward precisely as RL suggested but I really didnt like it. So I pulled everything forward at a different angle and I suppose I like this arrangement ok.... until I'm able to get new furniture. I still need to figure out how to decorate the walls behind the chairs.

Yes it's better. The chair corner looks cozier with the blanket rack in an accessible spot.

Silk scarves and other fabric items can be effective and inexpensive wall hangings, you can wrap and staple around a foam core.

looks more inviting already.

Can you move the sink into the dining area? possibly you could put the tv angled in that corner for some intent?

The blue table looks a little small, maybe it can go on that back wall as a place holder for now and add art to the wall.