So weird! I posted several in there. Let’s try this

These are from the listing

I think it doesn’t like the multiple photos...

More angles

Maybe create areas within the room: Tv/sofa area, table/arts/crafts/easel, building blocks/cars/trains, kitchen, pretend play. Kind of like a preschool. And get closed storage systems in each zone. Think IKEA

What a great space! Think about who uses it for what and divide it into zones. Moving the TV to the uninterrupted short wall, with the sofa facing, can create a (visually) quiet zone for that activity. You can set up a long tabletop, with storage drawers beneath it, along a wall for a coloring / crafting / homework station. Depending on the ages of your children, you can have a floor play area (with the floor mat). But right now, everything seems to be going on everywhere. Or maybe it's just the toypocalypse throwing me off.

Toypocolypse - YES! My husband is pretty hesitant to put a sofa in the middle of the room to divide up the space, but that’s what I was thinking too... then we could do toy storage at the back of the sofa.... the odd thing is that if we keep the tv where it is the sofa is not at all centered with it. I’ve been staring at it all day, I think I could do a large sofa in the middle and then maybe a chair and a half where the Dinos are on the wall

First get some major storage for toys since Christmas is coming there will be more. Is this a space you will use for entertaining or just your family? I understand the need for play space but really not the whole basement . You do need better lighting just do some LED pot lights easy to have installed. No chair and 1/2 they are completely useless seating . I like closed storage for toys I did deep drawers for one client with the drawers on casters it wass great the kids could pull the drawers out and wheel them to where the toys were load them up and put them back. I think the idea of using the sofa as a divider is a good one then the TV can go on the blank wall with maybe even a nice storage and display unit and a bigger TV. Besta from Ikea makes great Tv, storage and display that can be configured for eaxctly what you need,