Oh - the brass and glass tables also will be going away!

Blue carpet needs to go.
Wallpaper border needs to go then paint the area same color as the walls.
Trim that defines the border needs to go.
Paint ceiling trim white.
Probably all trim should be white including doors.
Time to recover furniture.
Blue carpet needs to go.

In other words - total redo! Wish we could...thanks for the comments, though!

I can appreciate your parameters you need to stay within. Depending on your over all style, there are ways to update with the saying, "if you can't beat them, join them". Try a wall color with a soft yellow base such as Benjamin Moore's 206 Winter Yellow or similar. Stick a few (no more than 3 to 4) paint chips into the oak trim on the wall and start narrowing down which ones are the definite no's. As for your sofa, see if its feasible to have slip covers made, other wise solid pillows and a solid throw will help tone it down. Hope that helps :)

Thanks - hadn't considered soft yellow but will look into it.