This is just a guess without seeing the floor plan but I think I would be inclined to take the dark granite off the fireplace and make the whole area including the alcove look like one feature wall ...shelving,cabinets and tv. Something simple to jive with the kitchen. Then, I would mostly just ignore trying to make use of just the fireplace section as a feature. It would then be a larger section of feature with the alcove included and you could float some furniture and have better use of the space. Maybe not just like the picture...but you get the idea. Edited to add: this way you could start your area rug all the way down from fireplace toward sliders. It will make your space appear larger.

How do you want to use the space? Eating? Napping? Socializing? Tanning? Roasting marshmallows? :-) Also, if you haven't already, try cross posting in Home Decorating; you may get more answers over there!

Maybe post a to scale floor paln of the area right now I see no place even for the kids to run, get rid of the hammock for sure . Is that kids furniture in the section by the door? Where I live that pool would have never been allowed without proper spacing all around . I honestly do not see where you can put anthing more tan a couple of chairs where the stuff is by the door.

IMO the easiest is to lay out the poolsize with spray paint following all the rules about spacing then that will tell you what size you can have . I like a decent walk space all around a pool and maybe in your case the shape will not be a true rectangle .I certainly do not see enough space for both a pool and spa.Your missing the length meauremenyto f the space and you will also need to know if you are required to have fencing all around the pool . Most places require that and your insurance will for sure .