I do not understand what "hallway to upstairs" means. What is happening in that room? With either layout, there is an uncomfortable amount of dead space at the front of the home. I would try reworking that again... but if you must pick one of the two, the side entrance is much more functional as far as your living/dining space goes.

Are you set on having a formal entrance and foyer? You can combine and reduce all four spaces marked closet, entrance, foyer, and stair hallway.