Either I've gone blind, or you're missing photos.

Sorry for some reason my pics didn’t load. Trying again☺️

The room doesn't look bad...maybe because it's so dark I can barely see it. ;-) I'd say the first order of business is better lighting. It looks like all you have are wall sconces. Try some table lamps on either side of the couch.

I'd remove (or move) the bar table and chairs in the corner. It's an awkward spot for them. Perhaps you could put your current TV console there to hold toys in bins. Then get a new TV cabinet that's properly sized for the TV, one that's at least half as long as the wall it's on (longer is better).

Get a rug that fills the space and allows all the sofa and chair feet to sit on at least the edge.

Get a nice lower TV cabinet and a bigger TV then since this will be mostly for watching TV get a sectional if you want. Lose the table at the bottom of the stairs add some larger more colorful art . Toys can be stored in the TV cabinet or in a box on casters that can be anywhere and brought out when needed. Do you have a bathroom down there If not I would add one of those before the bar. Could you maybe post a to scale floor plan for more ideas

Thank you for the suggestions. We do have a bathroom, 2 large bedrooms, an exercise room, laundry room and utility area. It is a walkout so lots of light but yes only 4 wall sconces and a low light fan overhead. Wish I would have spent the money for pot lights. The little nook by the stairs is plumbed for a sink. The TV has wires and plug in behind so cannot move real easy. I like the idea of the longer tv cabinet. Would you suggest pulling the couch away from the wall where it currently sits? The room is 18’ x 15’ but that door needs to be accessible. The flow of traffic to the bathroom is important as we don’t have another one for pool use. Ideally I would like to move the door opening of that triple French door to the other end so it doesn’t interfere with the flow of traffic, but sounds like it would require a new set up.