Consider investing in banquette seating - or buying something like it on craigslist . . . putting a banquette along wall 3 would save the 2 1/2 feet required to be able to pull a chair away from a table - ballards sells them in sections that fit together in a couple of styles and I think crate and barrel has one on sale now. . http://www.ballarddesigns.com/ProductSearch2#w=banquette%20seating

or move the loveseat to face the sofa and put a drop leaf table like a sofa table behind your loveseat with chairs at each end. . . Banquettes are dead useful in most homes somewhere . . they save space and give another seating area when you entertain- your table would then ideally be a pedestal to minimize footsie conflict with pesky table legs. . .
Love seats, however, are usually a pain - replacing this with two chairs - two good, comfy chairs, would be another great craigslist task . . chairs seat more people, are easier to arrange and usually add more style . . so for future, divorce the two in separate rooms and give them new chair partners . .

If the coat closet is wide enough, you could put a tall open backed bookcase parallel to the coat closet next to the sofa and create a sort of entry screen . . ikea has a cube case that is used this way frequently, that would also give you a laydown space right inside the door to stage things you need for going out - backpacks, keys in dishes there, mail from coming in, and even put hooks on the end for jackets / baskets for mittens/hats/sunglasses / outerwear . . . You can always hang curtains behind / around . . from the ceiling if you want more privacy at the door . use a heavy weight solid in a pretty accent color you would like to repeat . .

I can't thank you enough! I saw a frustrating empty room, and now I actually have some idea of what to do with it!

The bookshelf idea is stellar. It would create some separation and give me some much needed storage. I was considering hanging curtains on the closet. However, the closet is fairly long and open... it might be better to add a small chair or stool for sitting to tie shoes, etc.

The loveseat may actually fit in my bedroom with a little shuffling, which would free up space for the chair idea.... Yay for more seating! The banquette seating is also brilliant, thank you! Gives me something to do with that corner on wall 2/3 which is currently home to dog toys and a yoga mat.

Thank you once again! I'll post some progress pictures asap.