IMO, if you remove the storage bench under the window and remove the quilt rack, you could angle the couch to face the TV and might have room for the leather chair in that conversation area and have ample angled access to the dining room. You could put the area rug in that area. And then a couple of chairs and a lamp table in the area across from the front entrance. And declutter as much as you can.

It’s hard to say if this layout would work without knowing the measurements, but you may want to consider it. The first photo shows the couch facing the stairwell with the TV mounted on the wall. The second photo shows a chaise for reading and enjoying the fireplace. I’d remove all three white cabinets and have just one long wall-to-wall storage console under the window.

I would center the sofa under that honeycomb wall shelving.

put the table that is under the window now, between the sofa and the wall and put a lamp on it. (remove the rug and all the extra along the stairway) put the rug in front of the sofa. Leather chair at the base of the stair facing inward to the coffee table.

Have you looked at possibly moving the TV? Do you use the fireplace enough to consider it in the layout? You might consider moving the TV either to the blank wall behind the sofa, on the staircase wall, or where the floor lamp is. The angled TV currently seems off. Here are a few designs that could help you come up with a better layout for your living room:

European Country Flair · More Info

Posh Home Remodel · More Info

Streamline Style · More Info

Life of the Party · More Info

Westfield Open Concept Refresh · More Info

You have too much in that room, IMHO, particularly along the fireplace wall. I would eliminate some of those cabinets.

You can mount the tv over the fireplace using MantelMount, which lets you pull it down over the mantel when you want and angle it differently.