If you don't use the fireplace, you can close it up or add some storage or side table to the right to make the fireplace feel more like it's part of the room, rather than floating around on the wall.

I don't think the room is that small, but the placement of the furniture and rug currently breaks it up and makes it feel smaller. Is there a reason that chair is all the way across the room?

With the current furniture, the first chandelier works better. The second is too small. I would also suggest Rejuvenation's lighting which has more classic lines.

Seems to me the fireplace isn't a working fireplace, so I'd close it up and have the wall space. I'd probably get rid of the bench too and close the room up to there too. Then that wall becomes the wall to put the sofa on.

I would also close up the pass through to the kitchen. In your living room, why would you want to see the kitchen? Then you could do an L shaped grouping with the focus on the outdoors. Do a nice coffee table and hang a fixture in the center of the room.

I might find a subtle textural wallpaper for the 2 walls and maybe a more colorful rug with some pillows that will tie into the rug.

I would close up the fireplace and fill in the bench area to become a pony wall. You could then pull the coffee table closer to the sofa (about 18" away) and pull the chair over to the conversation area. On the wall where the chair is now, I would add a console table with art and a pair of buffet lamps.

An option may be to to get a quote from an engineer on a ridge beam. That would allow you to take out the wall if it's load bearing.

I would remove the bench and block the fire place.

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