That's the parlour. Use it as a sitting room for conversations around the fireplace. Or maybe a library.

This is when a floor plan with dimensions would be SO helpful! Is the door with the half moon the entrance? What is on the other end of the room (the side the picture was taken from)? What room is through the opening on the left.

Barring answers to the questions above, I'd put a small loveseat in front of the window, with one of the chairs angled towards the sofa to the left of the fireplace. Larger rug, squared in the room. Longer, more narrow artwork between the windows, with a side table and lamp in the corner. Eliminate the small picture - and add a tall plant between the fireplace and door on far side of the room. Roman blind on the window.

I would move chairs flanking the window and get curtains.

An immediate improvement would be to place the chairs either towards each other or angled a bit towards the window, with the small table beside the chair that is to the left of the fireplace so the grouping feels more open and inviting and fits better in the space.

These are the other two rooms near parlour

Yes, the door with the half moon is the entrance from the front porch.

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i would put a long table in front of the winow with lots of plants, and do a wide armed modern chandelier

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or i might put this etagere to the left of the fireplace

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It looks like it might be a great place for a small sitting/conversation area. Here are a few of our designs to aid you with this dilemma:

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Two chairs and a small table work. The big question is where to put them. The examples above with a curtained window with the chairs in front seem to fit your older house’s “feel”.