Remove all the clothing and post some photo's of the whole room for better advice;)

* the picture is taken from the dining area- you can see in the floor plan that the living room and dining area share the same open area.

Can your TV be relocated to the corner where the bookcase is? IF so, I'd switch it with the bookcase. It would be nice to have a focal point there. Then pull your sofa out to face the FP.
The round thing on the wall behind the sofa, can't tell if its a clock or mirror, is hung too high and it's too small, so I'd take it down.
I don't know what that wicker sofa is. Doesn't look like you use it except for storage. Consider getting it out and we'll figure out where you can set those items, maybe a trunk.
A large rug would help define the family room more. Do you have one or would you like suggestions?

I agree with Maguire, float the sofa facing the fireplace and TV so that all traffic through the room is behind the sofa.

The bookcase on the diagonal wall is a great idea Maguire! I'll try it out and get back to you.

I'll repost a pic of the wicker sofa soon where you can actually see it- we had a little dilemma and had to put all the clothes on it temporarily. I don't really have anywhere to store it so if there's any way to make it work I would like to keep it there.

I don't have a rug- suggestions would be great as I'm starting to shop around!

Can you get a better picture of the rest of the room off to the right? !

Oh well, I just explained this on your original post which had more photos, hopefully you got all that:

Hard to get an idea of your style. Can you tell me what type of rug you like? Traditional, floral, geometrics, anything here grab you? And have you thought about an accent color. I love your walls, but how about some more blues (like your candles), yellows, and reds into the rug?
Going to sleep now but will look around tomorrow.

Okay here is a picture with the furniture rearranged. I think it looks much better so thank you all!

What do you think about the rattan couch where it is now (you can actually see it now haha)? Also we are getting new cushions made for it- any suggestions for colors/fabric?

There's nothing that really expresses my style so far in this room. But Ideally I like things to be really cozy with both traditional/ethnic and modern elements.

For example here's a tapestry that I really like: http://images.urbanoutfitters.com/is/image/UrbanOutfitters/21077839_080_a?$beauty$

So I do like the idea of bright colors mixed in.

I'm going to delete my other post. Thank you Barnhart for your help there. You're layout is almost exactly how I just moved it to and it really works.

Hello
adding cowhide rug, with give an amazing classy look to your interior.
You can view my houzz profile or facebook page for more images, in mean while i am attaching few that will really stand out, in this interior.
Thanks again
Hani Naeem
www,facebook.com/decorhut

decorhut- thank you so much for posting pictures for me. However- the cowhide rugs are not in my taste.

Here's a variety of options, let me know what you find. I think a rug will make a big difference in warming up the room and grounding the conversation area. The striped is an inexpensive dhurrie.
Checking on etsy for art work for the wall behind the sofa. Or you could look for a large mirror
What do you think about a sofa table for behind the big sofa? It'll make the back of the sofa look nicer from the front door.

http://plushrugs.com/loloi/stanley/st-09/steel-beige/
http://www.houzz.com/photos/products/traditional-rugs-reds

A rug sale at onekingslane.com today!
https://www.onekingslane.com/product/24500/1563442

Just would like to say thank you all again so much for your great, fast replies! All of your advice about how to rearrange our furniture and color schemes made our living room look so much more like a home. I've got lots of ideas now for how I'd like to decorate and bring it all together.

We bought a rug (similar color scheme to the second rug in Maguire's suggestions) and a big art piece from the local thrift shop to replace the tiny clock.

I'll post after pictures once I can replace the curtains and add a little more!

What a sweetie you are! I can't wait to see your pics! Thank you.

hi, love the layout. I have a wicker sofa like that with bold print box cushions for the seats and different coloured overstuffed pillow sized cushions for the back and sides. Draping throws over the arms also adds warmth and tones well with the cushions. It helps give colour to my room. ANd it costs almost nothing! You could try doing a similar treatment to both sofas so they have a similar look even though they're different. Also that would allow you to introduce whatever colour is your favourite. Looks like you're moving towards a Moroccan theme? Good lighting can change the whole tone of a room too, so looking out for old lamps you could spray bronze can inject light and reflection. I put beige light bulbs in mine to add light with warmth. Keep it up, this is awesome!

Yes, that's a really good idea. I actually found some tan tie-on cushions (meant for patio furniture but they don't look like it) for really cheap at Ross- which are on there now to match the other couch a little better. I was planning to put pillows on both couches to pull them together but hadn't thought of the throw- which I like because I'd like to go for something really cozy. I'm all about snuggly things!

I DO seem to be moving that way huh? Mostly b/c our parents gave us the wicker sofa & the woven round lanterns- I hadn't considered that theme but I think i'll look through some photos to see if I'd wanna keep going that way.

Thanks for the lighting suggestion. I love painting/sewing/whatever I can pull off to save $$.

I'd do something like this, angle the layout of furniture to the wall.

I tried that layout out bc it looked like it'd be really cool/different, but it just didnt look as good as the other layout suggestion to me- bc it took away from the space behind the couches which I like having more of