Move the living room wall over, and reduce it to one half height.

Move LR wall just enough to be able to create a mini mud room of cubbies/drawers or baskets under for shoes/and baskets above for hats and misc. Ideally a cubby for each person. It also creates a seat for putting on shoes and dropping bags of groceries while entering. Might be bearing wall so system could help keep bearing. Need professional help re that wall status. While I like a half wall a full wall gives the height for all needs above. Current closet holds the big coats and not used daily. Could the entry door swing outward? Looks like a small double entry system.

I would remove the glass door from the entrance to the hallway to give people the room to enter. Then I would re-work the closet’s hanging, etc. storage for shoes, hanging area for coats. Move seasonal coats out of the area when not required.