No TV above the fireplace, may have a concern for being too high for viewing for long periods of time. Maybe you can gain more seating by placing a chair angled to the fireplace on the right side of the photo. Add a square ottoman on the right of sofa in photo to also use as seating and end table between the sofa and the chair. On the left wall a two seater bench/ottoman. Seating for 7 people. Large round coffee table.

Thanks to you both! I should also note... This is the photo of the current owner's set up but this is not my furniture - I have a total clean slate to buy new pieces.

How large is your TV? If you flank the FP with two cabinets to create a complete wall the TV would fit on either side, flat to the wall.

Paint no accent walls. Go a med gray. Pewter by Ben Moore. Put TV on low media cabinet in dark wood. Put on same wall just don't angle push up against wall. Buy a Low leather in pale gray sectional float in room facing firepl. Put a right side chaise. (It would be on TV side) On wall where their sofa is add 2 club chairs in a print fabric. Choose a accent color, use it in chairs, rug and pillows. Area rug 8 x10 gray, black graphic design. All furn a contemporary look. Chome legs etc. put floor lamp tall in stainless behind chaise. Big ottoman square or round 36" in a color or a zebra. Add big palm to right go fireplace. A small table between chairs and a large 45" sunburst mirror center on wall over chairs. Over fireplace a bold art in multi colors. Paint brick. White, all trim paint white. On windows keep it simple with end panels in a light wt woven fabric in white. Stainless rod. Extend pass windows 5" .floors are nice as is base board keep white.

You could reverse the sofa and place it on front of the window leaving enough room to squeeze in .and get an entertainment unit for that wall



or

go on the diagonal

Over FP a narrow pic would work best should not go to ceiling. See how other owner hung pics way to high. On that wall with chairs hang 30" from floor. Over mantel 5" above top. Keep walls simple don't clutter mantel in small space must keep clean lines. When buying furn take measurements of room where they are going. Buy to scale of rm.

get the tv out of the corner. but don't hang it over the FP, it's too big, and it would be too high for comfy viewing.

put it on the wall that the couch is on in the photos.
get a small sectional (like a karlstadt from IKEA) and put it opposite the tv. add a fabric pouf or 3 for extra, relaxed seating, and get an upholstered ottoman that has storage inside.

you can get some bookcases to flank the fireplace, and build them in if you want (if you want to do this, google "billy built in", trust me, most versatile bookcase i've seen). then you can either have the tv mounted on the wall with nothing under it, or have a long low console under it for storage of tv accessories and dvds.

I don't think a small sectional will function well. It might be a bit awkward to enter the space.