Move the TV off the fireplace, and put it on the wall where the sofa currently is with a low console under. Float the sofa so the back is to the door, it will then create a defined living room space. It seems like you may have too much/oversized furniture for the space though

Sina thank you for the suggestion. I had thought of this as well. The only problem I see is that the space to enter the living room space off the side looks quite small and basically only a couch fits that space. I don't have the means to change the couch.
Also, would this make the area between the couch and the fire place just kind of "dead space"?

That dead space regardless, it's a traffic path. That layout is the best way to get a defined entryway. The other option is to put the TV on the wall where the front door is with the sofa facing it. Like I said, your sofa is too big for the space so it's not going to be perfect.

Thanks for the suggestions Sina. Unfortunately I cannot do anything about the couch and was hoping I had missed some other clever way of making a space to drop keys etc.

I understand that it's dead space but it is at least space that now the kids can play around on/sit on the floor etc and if I had the means the turn the couch the other way then it would just be a walkway and not serve as "ground floor" for kids to hang out on and play games while we spend time as a family on the couch. They kind of end up behind you.

If the first picture, am I seeing an L shaped sofa and a chaise? What is between chaise and sofa?

So the whole thing is a sofa and a chaise.I did remove the chaise away from the sofa and put it on the side with a small table in between because I wanted the space in between the sofa to be bigger. It can come together and make a u shaped sofa. I am open to suggestions.

Could you do without the chaise portion? Then you could place your tv on the wall. Without measurements it's hard to understand your viewing distance. Or, your room might feel more comfortable with sofa in U shape but pulled from wall a bit to let it "breathe". Looks crammed up against the wall now. You appear to have a console beside the door for dropping keys, etc. What size is that general space?

Denis,

actually I modeled it wrong here it the door does swing to the other side so I was thinking of putting a table like this to use upon entering. I thought this might help give some sort of enterance and get a separation in the room

On a smaller scale, storage as well

Perfect! Instead of a console, consider a cabinet with drawers (for gloves, scarves, stuff) and accessorize the top. Add a bench under the window.

I would add a screen to the side of the living room seating next to the door, just so it doesn't seem so close to the entrance and gives you an enclosed cosy feel when sitting there.

Irene, Denise,

Thank you for the suggestions! These are great and I might see if we can build something like that.