I'd float a sectional where the beige sofa is and would put a family game/snack table by the fireplace where the dark one is. Everyone here loves grey-blue so you can't go wrong with that.

Nice space. I agree with the sectional so you can enjoy the fireplace. Then place shelves and tables around it. I see a big, handy shelf unit in the back. Would you consider a TV over the fireplace? If not, place it on the big shelving unit.

Consider your sofa or a new one with (slimmer arms, less bulk) on the window wall with side tables and lamps. Buy a pair of slim armed less bulky chairs that will face each other flanking the sofa. Sell your leather loveseat & large chair. I would not be concerned about one of these chairs hiding a bit of the fireplace. You don't have a conversation area now, it is more of a waiting room with all the furniture pushed against the walls. I think you need to focus on storage for the wall backing the stairs and to the right of the fireplace. A very long console with doors, drawers or matching large baskets to hide all the things that are on your tall bookcase. Perhaps the large toy sets in the corner could go in your child's bedroom? When kids go to bed, it is nice to have a room for adults to enjoy. Kids play with a select few toys, if you limit it to one basket and rotate their selection once a week, they are content. Keep the rest of their toys elsewhere. If your mirror is not reflecting niceness, move it. Photos attached for storage ideas. Pick your paint colour LAST!