Well, I have suggestions but I would need lots of dimensions to see if this could work. Pull the sectional down more toward the tv, centered on windows if possible. I’d do whatever I could to find another home for the coats, whether in the closet under the stairs (if available, would be the first choice) or even moving the display case out into the room and doing two tiers of hooks. (I’m showing the display case by the back door). This would allow for you to create an “entry way”. I would look at the shoe cabinets from IKEA. They are very narrow and look like furniture. I would put that where the coats are now and then possibly a mirror above or wall decor. You could also find a more decorative mail/leash holder in lieu of mirror. Move the toy storage unit behind the sofa. You could put the dog bed there too or add a playmat. Nice plant and arc lamp in the corner. For window treatments, I go for Roman shade so you can get some color and pattern in the room. You can also add color through an ottoman. And with the toy storage gone from the window, I’d try to have a get a piece solid surface material just to lay on the windowsill so the paint doesn’t continue to get scratched by your sweet doggy.

Some suggestions:

--Remove, remove, remove gigantic blue chair/beanbag. You have a massive sofa which is sucking up most of the space and light in your room. Get rid of Big Blue today!

--Replace the kids' storage cabinet under the window and the cabinet under your TV with a very long, low, wide shelving with baskets, which is the only place the children's toys will go. The shelves should run from one end of that wall right to the edge of the stairs. Rotate kid's toys out elsewhere so that you only have one storage center for them.

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--Swing the sofa around so that half of it is under the window and the other half is facing the TV and new storage. Move it forward enough so that you create an entryway from the front door with the back of the sofa.

--Orientation here isn't right, but here's how to use the entry space you create once the sofa is moved forward, the blue chair is gone. Wouldn't you want your living room to look a little like this?

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Alternate layout: Bring sofa toward TV wall as suggested but forward enough so that you can use the corner created behind the sofa, that's unused now, for a small play area for the children. Put easel there, some small chairs. We don't have measurements, so I'm not sure how much space you might have to work with.

--Decluttering should come first, but if you see some examples of layouts that would really work for you, then move that sofa now. Forget about pillows, throws, etc. Down the road get a really nice art work and those lovely Roman shades Nancy suggested to pull the eye away from the massive sofa.

--Going forward: Get two small leather storage ottomans, not one big one. (Measure how much space they'll take up--I'm just showing this one as an example. They're not hard to find in all colors. You want soft corners for the kids' safety.) Pick storage ottomans in a light, pretty color that will echo some art work or Roman shades:

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