Need a better picture and ideas on what furniture you plan to keep/buy new.

I would definitely turn your current island so you are facing his living room. Then have a space that creates a walkway before having the furniture to the living room. Make sure that the living room to kitchen is as open as possible and if you have the type of space where the couches could go either side and the place behind the island could be empty or just a coffee table etc, it would open it right up!

Keep the colors in both rooms from the same color strip card. Does the family room have any natural light? Lighter shades can go where there is less natural light and darker shades where there are windows and good natural light. We would need to see this end of the family room to advise on flow and furniture placement.

I'll take more pics tonight...