Will the cabinet to the right of the fireplace fit where the hall tree is?

If so, put your armchair and table/lamp in that corner.

You have three dining chairs. Flip the end chair and position with back to slider. Buy an upholstered host chair for the other end.

The hall tree can go into the entry, if there is room, or to the left of the fireplace.

I would remove the rug. Visually, it is taking up so much space, making the dining area itself too commanding.

I would move the big cabinet in the corner to another wall and take up the rug.

I would remove the kitchen island and replace it with a round dining table. It would be okay if one edge of it came out further than the kitchen wall frame. With your exuberant art over the fireplace, I think tables with bases like these could be a nice replacement for your island

Parq Round Dining Table · More Info

Legacy Classic Kateri Round Pedestal Table, Hazelnut Finish 3600-520 PROMO · More Info

I’d get a mix of lightweight kitchen chairs for the table so that they can be easily moved out of the way and tucked into a corner of the living space

GloDea Shell Indoor Chair, No Armrest, Set of 2, Beige · More Info

but also include a pair of fancier chairs that could be turned around marched into the living room to do double duty as guest chairs in the living room.

Edina Dining Chair · More Info

I’d put a smallish rectangular Turkish rug in front of the fireplace, put books and a very comfortable reading chair with its back to the window/doors, and maybe a love seat on the other.

I’d move and replace lighting as need be to make it all work.

Two objectives I think are creating two spaces that are functional/distinct, but at the same time having a connection.

Hopefully your table would work horizontally, if the chest could be moved to wall with the small art. A narrow console/mirror would open up the dining room visually.

Accessories/decor are important. A large rug would ground the room and you could easily reupholster chairs to complement. A new chandelier would be great as well. If it were me, I’d head for casual and inviting.

Didn’t know if you were thinking about two chairs and set up below (and accessories) are perfect. Budget wise, you could just add a rug here.

If keeping your chair, add a cushion and throw and skip table. If placed on a slant and only added a floor lamp, you may have room for a narrow bookcase next to fireplace, creating a cozy little nook feeling.

Try putting the table end touching the island

The chest does not fit on the wall with the small art. The space is large enough to place the table either horizontal or vertical to the fireplace wall. I do have four chairs for the table. The armed host chair is in another room and can be moved. I was considering a larger rectangular rug for the room. Maybe to be placed under the table and chairs and extending under my reading chair? Would a more tone on tone pattern work better for the rug? I could purchase a custom size and have the edges finished. I need to have a place to put a cup of coffee and prefer to keep the side table. Both sides do fold down.

textured ?

https://www.stainmaster.com/Carpet/products/details/MCP0010549-COL0086069

https://www.stainmaster.com/Carpet/products/details/MCP0011561-COL0095846

https://www.stainmaster.com/Carpet/products/details/MCP0012132-COL0101521

https://www.stainmaster.com/Carpet/products/details/MCP0011120-COL0027036

I like the idea of 2 chairs for reading but think it would feel too crowded. I am going to purchase a new chair for this area and also am repholstering the dining chairs.

You say you want an area for reading but you don’t want 2 chairs. You’ve got one reading chair in the room already, as shown in the photo, with a table next to it for coffee, Etc. Why can’t you read there? Just trying to figure out what you are trying to accomplish, or what is dissatisfying you about the present arrangement.

I do read there. I am replacing the chair as it is not the most comfortable. 2 chairs and an end table is ideal but the space is not large enough. The hutch is a family heirloom that I want to keep. It seems rather large and oppressive in the space where it is. I am questioning the size and busy pattern of the rug. I am open to any and all suggestions for the space.

I don’t imagine my latest suggestion much appeals to you but it occurred to me later that if you can find another place for the hutch, creating seating in that corner something like this might work for you

Traditional Ranch · More Info

The bench love seat doesn’t need to be an ”L”, It could be just straight across and you might be able to find one with right measurements that you can buy off the shelf. Instead of the kind of sconces shown in the photo, you could get down lights for reading. You could add an ottoman for comfort with a smaller table.

In that configuration, the dining table would be centered on fireplace and cheated toward the kitchen. On the side of the fireplace where your table and chair are now located, a drinks bar might be nice, in the spirit of your Lillet poster.

An upholstered armchair at the head of the dining table closest to the window (or one at each end of the table) could make it possible to have conversational seating at that far corner of the room by turning one chair at the dining table toward the seating area between the fireplace and the window.

Have you tried it with the table rotated and moved closer to the windows? Then there might be enough room for the two chairs and a small table between them, all placed in front of the fireplace.