You'll need to get very narrow arm rests, and measure twice, buy once for your pieces (not only for the pieces, but also for the space it's going into. No sectionals. As you said, it limits your decor options. Do not pack the room with furniture. How many people usually use this space?

I would do a sectional facing the 14”5 wall. With the TV on that wall. This way you have a defined cozy space. New very large rug. Coffee table and new curtains , and possibly a new light. This will all bring the room together

This type of layout should work for your room. I would select a sofa and two lounge chairs. It's always the most versatile option for a living room.

If your TV stand is not designed to fit in a corner, make sure you get one so the stand takes the minimal amount of space in your room.

Typically 5-6 people; 2 younger kids.

8 people in that room is not possible unless they are on the floor.

5-6 total

I like the general layout you have, with maybe Beverly's change to some chairs for lightness. Large end-table and lamp in the corner -- that leaves room next to the door for a smaller entry table with a drawer, if you need a place to drop mail or hide mittens. Large piece of art over the two chairs or loveseat. I'd try to use all art in this space, and keep the family photos in the more residential/private zones. You don't necessarily need decor around the TV, although some prefer it.

The most flexible seating is a 3-seat sofa and chairs. I would put that big TV on the 14' wall, sofa at the window and two chairs and floor lamp on the 6'8" wall, and angle a lounge chair and table by the entry into the other room where the green art is on Beverly's floor plan. Store a couple of bean bag seats in a nearby closet for the younger children.

I would put a sectional in the corner where the tv is now, the tv on the 14.5 wall, two lounge chairs with a table between, maybe swivel, in front of the windows - low backs so as to not block so much of the windows.

Your layout looks good to me, except I would just do a sofa and two chairs. The sofa on the back wall as you have it now, and then the two chairs in front of windows.

https://www.raymourflanigan.com/living-rooms/sofas/daine-sofa-200028151

Set of two recliners. They come in a bunch of colors.

https://www.wayfair.com/furniture/pdp/langley-street-izaiah-manual-recliner-lgly7529.html

A couple of small storage ottomans to use as coffee table(s) and extra seating.

And some type of art on wall, over sofa.