I'd start by looking at the whole house and how you use each room. Then I'd look at what you want to do in your house and how easy/difficult it is to do each activity. It sounds to me as though you have done a lot of work to make the house work for you--you now have a combined gathering space and kitchen, you've made the den into a dining room. What else do you need? If you have small children, the living room could become a playroom. Or homework room. Or hangout for teenagers--their own space, but close enough to kitchen and other places the adults are for some supervision. Do you need a quiet, grown-up space away from the kids? This room could become your own personal retreat from the rest of the family. You could set it up so that you can invite friends over for a cup of tea there, or a game night. The living room could also become a library, if you have a lot of books. Add in bookshelves, a desk and comfy reading chairs. Or it could become rehearsal space for your rock band. Or a hobby and craft space, if you like to quilt or sew or paint or whatever. Or take all the furniture out and make it a yoga studio. Don't think of it as a living room. Think of it as a space where you can do whatever you want to do. This post was edited by camlan on Mon, Mar 3, 14 at 9:04

From your description, I'm not clear on the layout at all...when you say put the tv in the small back room are you talking about the area in this room by the sliding doors? A sketch of the room with dimensions would be helpful, esp for you as you try to lay out furniture and need to decide what fits and what doesn't. I know you said you want a more formal area for when you host guests, but I think, given the toddler, you should start with function first. IMO, a house should give the most space to the maximum utilization. So if you will be needing play space and tv space which will be used on a daily basis, then that should take priority over a formal seating area which may be used less frequently. Rather, there are ways of combining both functions...keeping a play area with toy storage, perhaps by the slider and then incorporating seating and family TV time and entertaining around the fireplace. Regarding the windows, I would suggest that you treat the lower windows as you wish and ignore the upper windows. The vaulting in the ceiling has some odd shapes and some of the window placement is awkward, so I would ignore them ... pretend there is line going around the room where the lower ceiling is and don't decorate above it.

I do not have any furniture for this room, currently I have two dining room chairs in there so it's not just an empty room- so anything you can imagine in a living room is fair game. I am neutral about having a television in this room. I can always mount one above the fireplace if needed or use a tablet. I plan to use this room as a gathering place for a few friends/family to sit and talk sit. I would also use room to read or relax in my free time. My home was built in the early 1900's the house is pretty traditional. I have very high ceilings (12 ft) and very tall windows (6ft.) Windows are just normal double hung windows. My fireplace is dark Mahogany wood (very similar fireplace photo attached) Stairs are also traditional/colonial- dark hardwood floor on stair treads and white risers. (Very similar Staircase photo attached below- I do not have wainscoting though)

Hey Mikeala, while you may have to make some compromises due to space restrictions, you can definitely fit a compact couch in the room. As @mindshift recommends, it would a good idea to keep all your furniture compact and as small as possible. I've made a couple of options for you here. (All dimensions are approximated from the images you have posted) For the first layout, I've eliminated the coffee table and added a slim console by the entrance, a wall mounted TV and an end table. You could also buy nested tables so you could stack them when they aren't being used. For the area by the staircase, I've added a tall bookcase and a couple of chairs for extra seating. adding a mirror would give a sense of a larger space, I've styled this room with modern furniture with a touch of hollywood glam. For the second option, the entrance is more open although the TV unit has been placed on the large wall. This allows TV viewing from both seating areas and yet separates the space. You may prefer this layout if you don't like the idea of having a living right at the entrance. I've styled this room with Scandinavian furniture. Do send us measurements and photos so we could further customize these for you. You could also add/ swap furniture and make your own layouts here.