I have had two center entrance colonials and alway found arranging furniture frustrating.
I do think your first problem is the rug. Roll it up and then try moving pieces around.
Suggest you start with the sofa, placing it on the inside wall, facing the fireplace. Grover’s swivel chairs, side by side.
Assuming the other front room is the dining room. For now, while children are young, make it the family room, with t v, sectional, to chests, etc. Put the rug in that room.
Make the back end of the living room the dining area, with built-ins on either side of the door and the front window.
The dining chairs can also be pulled into the conversation area if you need more seating.
Idea for built-ins, adding a window seat under the front window.
Q
Built ins
Q