Why do you have the sectional on that wall?

It is the only place it fits. The wall perpendicular to it without the fireplace has a cutout window into the kitchen that would be in the way of any couch and the parallel wall is too small due to a closet under the stairs.

Is the pass through window higher than the back of couch?

You could do something like this: have a couple pair of shutters painted a complimentary color, and hang over the back of couch....making it look like there is a big window, rather than a small off-side one.

That gives you the opportunity to have a larger, properly sized area rug, instant wall decor and a better view of the fireplace.

Do you have any photos?

That does look really nice! The other problem with putting it on the wall with the cutout is the couch would block the entryway from the dining room.

I do not currently have any photos that would show the space super well because we are in the process of unpacking and nothing is arranged properly.