I forgot to mention.... I would like to know what colour scheme would be nice (for couch recovery)

That room looks a little dark/cold. I would put some warmer color on the walls, go cream with the sofas, accessorize with color. And I'd add some good lighting fixtures into place.

When you're ready to look at art, take a look at my work. I have hundreds of configurations of canvas prints and original art: https://www.etsy.com/shop/katshoa

Good luck!

Are you buying new couches? if so, scale down the size. I'd try a sofa and two small scale chairs. They can flank the FP or sit together in the window with a table between them. Are you renting or can you paint? Once you've picked out a fairly neutral sofa (steer clear of brown or black leather ones and try gray, maybe) select a colorful palette for your room. The walls above the wainscot will really be key to enhancing your space with color. Don't go for matchy-matchy tables. Keep them interesting and varied but the same height for end tables.
One or two table lamps and one floor lamp should do it. Like your mirror at the FP but it isn't reflecting anything but the opposite wall, so that wall needs a Wow to reflect in the mirror - art that is large enough to show in the mirror when both are hung. Stationary drapery panels hung floor to ceiling over fabric or fiber roman shades will add more warmth to your space.

this pic submit for furniture/tv arrangement and see the built ins on either side of the fireplace
Where your TV is at present the wall can be decorated with photos as shown in the inspiration pic.
something to consider. What don't you like about the inspiration pic?

decoenthusiaste - Thank you .... I love your comments. I am not buying new sofas but the 2 that are actually going in there are not bulky. (the chair that is covered by a throw in the photo is also being recovered). I am having them re-upholstered once I decide on the fabric. I understand it might be cheaper to buy new, but my dad is an upholsterer :). The TV is on the end and the room is long and narrow and we use this room a lot so we need to be able to sit and face the television. I definitely think a big piece of art on the other wall sounds great to reflect in the mirror ! Also ... I just painted :( ..... went light because the room is so dark

P.S. The inspirations pic is beautiful !

I would leave the wainscoting and paint the upper half a beige color. Also I would remove the paint from the brick fire place. Also I would scale down the sofa and eliminate one. Also remove the chair and tv the space is to small for these items instead put pictures and accent furniture. Build a bench by the window for extra seating and put pictures up above the one couch.

Hope this helps