Your going to have to find a way to balance the shorter windows with the taller ones. If possible go with plantation blinds and no curtains OR make sure your shortest windows the curtains start all the way to where they meet the ceiling. For the floor and the set up of the furniture. Figure out your focal point..Is it he wood stove or a television. Use a large neutral area rug to set up the living room part or the room. Then on the parameter set up little areas like a bench area or 2 chairs with one small table in between them. Like a little sitting area away from the central living room area you made with your area rug. Hope that makes sense. Good luck!

Thank you - great suggestions!

We can only see three walls, so it is difficult to advise. I'd get the two cabinets out of the corners and perhaps put one or both of them on the walls under the loft (or just get rid of them.) Is there a dining room in the house, or could one end of this space become a dining area? Are there nice views out the large window and sliders? Lots to consider in order to make an overall plan that works.

Painting the walls in darker color would make a big difference right away. There is not enough contrast between the walls and the ceiling now which makes the room appear very high. You need to develop a color scheme for the room first. You can pick a warm neutral gray to create a nice background for other color accents. Looks like gray would work with your current area rug (lime green?) There are many other colors options as well. Can you post more photos that could inspire a new color scheme? How does the fourth wall look like?