Looks like a really pretty house! I think I would try the couch facing the windows, with the back to the dining room doorway, pulled into the room far enough that you can pass behind it easily. I think I'd try the tv in the corner kitty corner from where it is now (to the right of the window) and the lighter chair where the table next to the fireplace is, but not tight against the wall. Not sure the bigger brown chair works, but looks like it's missing from the later photo anyway. I can't see what is behind the couch to the left in the picture. Is it a bookcase or?

I have a somewhat similar room layout. I like to be able to watch both the tv and the fireplace from all seating. I kept the tv where you have it now but angled it more. A 45° angle in that corner. That gives it a little more space away from the fireplace. I moved the big chair to the right of the fireplace but Around 4' away from the fireplace wall. Lastly I floated the sofa so it was facing the fireplace but at a good viewing distance. I guess it's around 8' from the fireplace wall, facing it. Stuck a console table behind the sofa so I can have a lamp and a few books. Added a glass coffee table in front of the sofa, a small side table next to the chair, and a floor lamp next to the chair closer to the fireplace wall.

Above the fireplace needs something - was mounting the tv there an option?

Well, since "floating" the couch or other massive pieces in the middle of the room doesn't feel right to you, and it does create a "wrong side" which so often ends up failing to fulfill any useful function, how about setting the couch close to a wall instead. Just 4-6" out supposedly gives a "float" too.

Also, because this room is pretty and has a handsome fireplace wall, I'd really try hard to protect and develop that potential by choosing another wall for the TV. Ours is on a side wall, with the fireplace on the end wall, both visible from couch and chairs. It's such a personal preference, but I like to have the fire crackling away on the side -- and not alongside the TV screen we're watching.

I'd try the couch in the little bay and not worry that it doesn't line up symmetrically with the dining room. Other items on both sides of the opening, such as wall art, lamps, curtains can be used to give a feeling of balance to both rooms. Then go from there.

If you'd like the room to perform other functions besides one conversation group that can also be used for TV/reading, would there be room on the entry end, for instance, for a desk in a corner near the entry (with a view of the TV perhaps)? Or? Maybe small chest and lamp could could go on the other side of the doorway for balance and additional storage?

Seems like the space above the fireplace was made for mounting the TV. If you like to watch both the fire and the TV, why not mount it? I don't like that look, but many, many folks do and are happy with that set up!