To Gizmonike: Yes to your first question. I have another family room (15x15) right next to the 'fireplace room'. That's what probably makes this layout even more so awkward. I don't know that there is anything really wrong with the door in the current dining area, and it could just be a strange thought in my head, but it seems weird to eat so close to the garage. There is a lot of traffic in and out of that door (much more so than the front door). A few other things to note here: as it stands now, we use the family room that is not pictured day to day. It is just me and my two boys and that's where we hang out. The only time I really use the fireplace room is to read, or to be by myself sometimes. This is also the room we put the Christmas tree in. As far as entertaining goes, I only do that a few times a year. So, in looping back to the original question -- if I used the fireplace room for a dining area, what would I put in the current eating area? Thanks again for your input. To answer other questions: I will graph this out so it's easier to see (and understand). I want to change this because I don't use the current eating area and I want to do something else with it.

You really only have room for a sectional and one chair, or a sofa and two chairs like you currently have. The sectional and one chair will not add anymore seating though.

A 3-seat sofa and two upholstered armchairs will give you a good foundation. Put sofa on wall C, TV on wall A and the chairs in the window.

Consider wiring the new wall for TV, which you can mount on an articulated arm for adjustable viewing. Then find a small scale swivel chair everyone likes and get five of them. Arrange one of two ways; in a circle around a small round coffee table or hassock, or in two arcs coming off the right and left sides of the fireplace (three on the wall side and two on the slider side.)