Thank you, Cheryl. I appreciate your detailed suggestions! Just to clarify, when you say "other seating facing windows", do you mean to the right of the couch (when looking towards the fireplace) facing the main window?

If I remember correctly, there should be a big room downstairs? Put the tv and the kiddos' stuff down there and keep the upstairs as a dining, entertaining area for adults.

Unfortunately we don't have a large room downstairs. That would be nice!

Here is a rough floor plan with a furniture scheme that might be able to help you. Not sure what the dimensions of the space is so this is a rough floor plan. I would do a sofa with a side table and a swivel chair facing the wall where the piano is and put the TV and console there.

Then I would put 2 Poufs on either side of the fireplace that can be pulled around the front when using the fireplace with the kids.

Where the table is currently I would put 2 chairs and maybe some ottomans depending on the space you have available. Also a round upholstered ottoman might be nice there too! I would use the fireplace and open walls for an assortment of art and some family photos.

Hope this helps!

Are you planning any modifications? New flooring? White carpet and young family are usually not in the same sentence. Considering opening up a wall? Plan all of that first even if you don’t execute right away. New window treatments would need to be first on my list.

I’m assuming you will need to keep a dining area? I think more info is needed for people to best advise.

Yes to new floor and window treatments. We also plan on painting walls, trim and doing something to the fireplace (not sure what yet). Not planning on opening up a wall any time soon. Yes, the dining area has to stay as the kitchen is very small. Thank you :)

For me I want what is the most comfortable seating to be directly looking at tv whether that is a sofa, chairs or recliner. "Other" seating is the less ideal viewing for the tv/fireplace with those same options. I also prefer to look outside instead of looking into a room at a wall. But in your case in front of the window may be the best option to open up the room and make feel larger. With a family a sectional in this case may work the best although it wouldn't be what I would normally recommend. Low swivel rockers work nice flanking a fireplace. There really is no better way of finding out if you like a room layout than moving the furniture and living with it for awhile. When I moved into my first house I changed the furniture arrangement weekly when I vacuumed. My favorite blocked the heat registers so I had it that way in the summer and changed to another in the winter. Look at a lot of houzz pictures for inspiration. You aren't the only one dealing with that layout.