tv should not be over the fireplace. so people have 2 couches face each other but harder to watch tv. back of the couch is where you put the console

I second not having the TV above the fireplace. I'd put it on the wall opposite the windows, with a long narrow stand beneath. If you hate seeing the back of the sofa, it can go under the window. Then place a chair at an angle, facing the sofa in one of the corners (by the fireplace, or by the stairs). Or, if they fit, have a chair on each side of the TV unit.

Is that electric baseboard heat? You can't put the sofa under the window with that heat, and the light coming through the windows will make the tv hard to see because of glare if you put it on the long wall. How do you feel about putting the tv on a stand angled by the door, with a sofa on the long wall and chairs next to the fireplace?

Thank you all so much (especially for the layout!!!) already so helpful for me. We are removing the baseboards so that won't be an issue. Only problem was we were also going to extend the house and take down the wall (where it is reccommended to put the TV) and have the banister go all the way across (to open the hallway). If we remove the top of the mantle, still bad to put the TV above fireplace? I know that's usually a no-no but I didn't think I had a choice.

I think symmetry may win in this situation. Perhaps consider two sofas facing each other, or a grouping of 4 arm chairs. Lovely space!

I would consider creating a better staircase area for the split level. If there's enough space, you can create something like this below.

Two sofas facing each other is the perfect set up for your room.

My guess is when your have your living room arranged with sofas and accessories then the staircase is going to become a non-issue. Right now, it's all there is so it jumps out at you.

Spend the money on two great new sofas, drapes and art instead of the stairs. Those will create the look you want to present.