Very often on this site people recommend that art be at eye level. I tend to think they are referring to normal size art. Having lived with a two story family room very much like yours for 20 plus years, I think that the space above the wall unit and even above the book shelf scream out for a large, vibrant or unusual piece of art. You can find oversize art online. I'd look for a large horizontal piece (at minimum 3.5 x5--probably larger) and something vertical (maybe 3 or 4 x 6/8) for another wall. If you can't find a single horizontal piece in the right dimensions to go over the wall unit consider grouping 3 pieces. You might also be able to find some bright tapestries or rugs to hang which can add texture.

We have a 90's suburban home and have been
slowing pulling the 90's out of the house room by room.

What's wrong with 90s? Focus on what you like, not things that are so-called "dated".

Things I love: the natural light, the tall ceilings

The natural light is very nice.

Things I can't change: the wall unit was a beast to move in and it's
the perfect scale so it's not going anywhere, but I know it needs some
styling help.

I don't think it's the wall unit that "needs something" -- it's the massive empty space above it. Grasscloth wallpaper might bring in a bit of texture, but it would only be a first step. Maybe something with an arch to mirror the windows?

I also dislike the lovely wall unit on one side ... balanced with an Ikea block shelf unit on the other side. Both are fine, but they don't match.
Things I want to change: the rug and the sectional.

I like both of these things.

You're in your "hard on the furniture years". Since you own the sectional already and since it fits the room nicely, I'd say keep it until the kids are older.

How about keeping the rug and "layering it" with another rug -- something in a warm tone?

Fireplace will go through a major overhaul in the next few
years.

Yes, badly needed. And it doesn't match the wall unit, which you like.

I also don't like the TV above the fireplace. The angle is odd looking, and I don't buy into the idea of pulling down the TV -- seems inconvenient.
blue chairs

Be careful of too much blue. You're getting a lot of "cool" in this room. Of course, if you remove the rug, the blue-overload problem would disappear.

Changing tables and toy buckets will be in my future for a while :)

I was wondering about the changing table. It doesn't do the room any favors, but with your youngest being two, its days are numbered anyway.

I understand that the toys will stay for years to come ... but could they go into some sort of closed storage?

There are so many beautiful homes on Houzz with two story fireplaces and vaulted ceilings but they are all magazine perfect

Study those pictures and hone in on the details that attract you to them. Aside from saying you're trying to ditch the 90s, you haven't addressed a style you hope to bring in.

So, how does the TV work when there's a fire in the fireplace? I've always wondered. Since you're raising a family in this room, have you considered having a family or kiddos portrait taken and blown up really big to hang above the unit? I don't like 1.5 chairs, but if you and the kids can all get in one of them for cozy time, I could tolerate it. I suggest you look at the great washable rugs from ruggable.com. I added one to the basement Kids Kave at the vacation rental cabin I manage and it is great! I know the sectional is kind of hulking, but I agree that these are not the years when you want to ditch it. If it will last until the 2 y.o. goes to pre-school or kindergarten I would hang on to it. Then you can upgrade to something nicer 'cause you'll have some free time to invite friends over for coffee and you may want a less child oriented space then.

Btw, You did not .... make it bad.

Here's idea for rug, lively, size idk....

we're around!

https://www.houzz.com/products/nourison-vibrant-vib08-8ft-0in-x-10ft-6in-teal-prvw-vr~151839294

I wouldn't yet touch the sectional a nice neutral stone color... or the chairs or fp... well, probably the fireplace blue could be more subdued....but you aren't the only one with blue and white at the fp. :)

Dressier dark of window shades - click on "more info" to see others in the photo for a good guide -- using same and similar hues from light to dark.

https://www.houzz.com/products/contour-rug-breeze-7-3x9-3-prvw-vr~33063774?lid=18894187

https://www.houzz.com/products/bryce-velvet-22-square-throw-pillow-by-kosas-home-dark-green-prvw-vr~116960442

Seeing this green treatment made me look at - large unit / arches nearby - idea for expert painter to repeat arch shape the entire width of wood unit, and up as far as seems good, way up though.

I have no idea what your budget is, but a 2-story room calls out for something interesting in the void above the 9'-10' area. I personally find it very uncomfortable in a space with that high a ceiling and nothing to break it up. Perhaps you could install some beams/trusses or woodwork in a contrasting dark color to bring it down? A large dramatic chandelier or two would add so much ambiance. Here are some gorgeous 2-story rooms for inspiration:

I was serious about a big family photo mural for that wall. You wanted fun and child oriented for the room.

Thank you so much to everyone for the ideas! My wallet certainly appreciates any ideas that include not replacing furniture. The mock ups really help too. I highlighted the wall with the stairs just to get a feel for the overall space.

@BeverlyFLADeziner the size and scale of the art you selected is perfect, thank you for guiding me! Do you have any suggestions on how to incorporate more colors in the room to make it more playful? I was thinking a new rug would be the easiest way to add more colors to play with and make the room feel less formal, but also thought about distressing the rug (what a fun project) as a DIY.

I would replace the ceiling fan with a statement light fixture and position the chairs together.

For more color...

No new color but different light...

Casey, the graphics on the wall are 4x4 from GreatBigCanvas.com There are lots of images to choose from if abstract is not your forte. If we saw more of the room, we'd be able to advise on the feasibility of adding faux beams which is another thoughtful idea.

Sure you can change out the rug is you're dying to spend $$$, but currently you have a rug and you don't have some of the other concepts suggested so a new rug would be further down on my list of items.

The most important thing is to get the layout and location of all the items firmly established. Is the TV going to stay above the FP? If so then that area needs some attention.

I don't know the dimensions of the room and the rug, so I cannot layout anything precisely for you without that information. A few more pics of the area and how it interacts with adjacent rooms and the staircase could sure be helpful.

fathead.com is another source for custom murals.

This photo illustrates some ideas for how to address the fireplace wall and the wall above the wood unit using wainscot as a wall detail. Also, notice the two-story drapery panels. Unfortunately, the chandelier is sized too small for the room.

Two more views of the room, kids "halloween decorations" and all :)

follow

I would rearrange your furniture slightly to make it better for children's play.

First I'd pull the sofa away from the fireplace to make a larger play area in front of it. Pull it all the way to the step at the back of the room. That opens up the wall unit lower cabinets for storage of toys. Any toys that don't fit in there, that are currently in front of the fireplace, I would put in the corner where you currently have the plant. Out of sight but still easily accessible.

The rug should be arranged so that as much of it shows as possible - it's your play area. The front third of the sofa should be on it for the portion that's facing the fireplace, and the portion that's facing the kitchen. It will stick out more where the chaise part is, which is fine. I like the colour and pattern and wouldn't replace it.

I'd take the books that are on the bookshelf and put them on the open shelves of the wall unit. I'd get rid of the bookshelf because I don't think it is attractive. Put the 2 blue chairs in the corner between the fireplace and the wall unit. With the light coming from 2 sides, it's a lovely reading corner.

The plant can go where the bookshelf is now. The change table can go there too.

you need to to something w/those walls above the wall unit.

let me post a few ideas that might help you take the room from the 90's. (and while the 90's were great, the decor was not. )

I'd paint out all of the oak trim to a nice bright bright.

Redo the fireplace. You have all the room, and the actual tile work is 3' high! take it up to the ceiling! (or, do some type of wood trim molding up to the ceiling)

for example, you should easily DIY something like this in between those columns above the mantle. make the slats flush w/the panel so there is no inset.

this is a type of shiplap.

then just redo that tile around your surround. you don't have that much to do.

I think this first picture is gorgeous. you could easily do this w/yours. the darker wall color, and everything else in the white trim. don't forget a nice chandelier.

Also, pics #2 and 3, show a type of wood trim molding that works wonders on two story walls.

this one is very simple trim work molding. and a simple solid piece of stone surround.

there are diff applications of it. you can do simple square panels like you see above the fireplace, and carry it over to that huge wall

this is an entry way, but the design works fine on your living room wall. you can make the squares a lot larger for less work. just do the math and divide the wall into equal parts.

this is simple picture frame molding. it's cheap and relatively easy. after it's installed, you paint it all one color

diff designs

BTW, along w/the painting the window trim, paint the staircase too

or, replace the spindles.

the other way to utilize the high space, is to do a horizontal piece of molding above your unit, (kind of like shown here) and then paint the space above it a darker color. (or vice versa)

or you could do a high board and batten type of wall treatment:

following

@Beth H I love the picture with the piano... I've thought about that design for a while with the picture frame molding and how to carry it throughout the room and onto the fireplace.

Ya gotta remember ---- all those lovely photos on Houzz are professionally staged just for the photo. Before anyone actually lives there. Quit beating yourself up and apologizing for having kids and not being "perfect". Your house is wonderful.

casey, (and Tara) some of those pictures are real homes, not just staged. There is no reason why, if you want it, it can't look similar to those pictures. You only need a few tweaks to your room. The walls are the major focal point (and the fireplace). Address those two and you'll find the rest falls into place.

I suggest you look at pictures of 'two story living rooms with wall molding' or 'board and batten with high ceilings' or a combo of those search options. you'll find all sorts of ideas.

Above mantel, either painted or new material: a noticeable pattern - could lessen need above wood unit [here texture-ish idk what it is]

above your wood? arch of right size, and 2 large pieces:

Mantel to ceiling idea with shibori pattern. The painterly design creates stripes over a beige faux grasscloth surface.

https://www.houzz.com/products/serendipity-teal-shibori-wallpaper-bolt-prvw-vr~108881300

https://www.houzz.com/products/georgetown-round-coffee-table-42-prvw-vr~36347404

I like if it's like fp tile.... solid, earthy direction... not a delicate piece, but imposing [in good way] like the huge walls and windows...

https://www.houzz.com/products/minimalist-large-round-light-wood-coffee-table-modern-geometric-block-prvw-vr~133069171

I’d say the art Beverly suggested is going to make a huge difference right off the bat. A real statement that draws your eye up. Don’t spend money on stuff you already have that’s workable.

I have read many times on this forum that you decorate the area where you live i.e. up to 8 or 9 feet, and don't decorate the high wall. Not sure why there is such a push to decorate the upper wall. I wouldn't.

... something to it ... the strong shapes of fp that are so structural looking.

I'd photoshop more there to make more focal, interesting

[instead of to other walls].

The tv in a corner unit would be better than disrupting appearance of fp.

@casey I'm not much help with the design of your room, but I'm very interested in hearing more about your Mantel Mount. My TV is too high above my fireplace and I have been researching the Mantel Mount. Are you still glad that you purchased this, does it work as you expected, and is there anything you would recommend when choosing which Mantel Mount model? I really appreciate your input. Thank you.

Casey, hello. I thought of your room when I saw this. Still wondering if a paint color same as your sectional wouldn't work for you -- maybe the center vertical could be a textured with plaster or something extra....