The wood trim is up to you. Do you love it? then work with it and bring in a better wall color and furniture that also works with it.
Personally, I'd paint the trim and paint the walls a new color.
you could just start with the inner window trim. here's how it would look. Do a little bit at a time as it can be a bit overwhelming.
Doing it white can also frame the room and enhance your lovely views. Some people on here get so upset if someone mentions painting wood trim. Why? It's not quarter sawn oak in some vintage craftsman. it was prob done in the 80's or so. really not a big deal, at least to me. If you hate the orange tone, why live with it? Restain it or paint it. don't live with it just because 'it's wood'!
You wan to highlight those windows? try painting that inner trim black. I'm guess this trim work used to that orange toned wood before they did it black
agree about removing that mantle above the stove. it's far too high. put some artwork up there. Or, can you move the stove to a different spot?
this is a space that can actually use one of those large sectionals that you see other people using in a room 1/2 your size. Ditto for a dining table.
take a look at 'family room w/cathedral ceilings' to get some ideas
look at the way the furniture is set out here
you could have a convo area, and a dining area set up like here. don't know if you plan on doing a TV
Q
I love the furniture placement ideas - I think I'll need a large sectional...
Q