It might be nice to divide the room so you have two distinct spaces, with the furtherst end being used for the toys. Your couch could be the dividing factor and with it's height, the toys will be more hidden and your children will feel like they have their own little area, and you will be able to have better conversations. Place your other two chairs where your couch was and add an ottoman. Pictures below give a bit of the idea. Move your rug down as far as you can to the left and then in the open space left at other end, you could add some cute carpet tiles which are are easy to replace if there are stains. On the far wall in the play area, you could add cubbies so toys can be easily stored.

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