Draw a floor plan of the room with dimensions & doors and windows marked. Is this your only living space? Looks like the end with the ceiling light was meant to be a dining room. Do you need a table & chiars there?

I’d consider making the open area in the kitchen the children’ play space. The shelving unit could move to the kitchen wall beside its current location. The bin unit/easel could go along the opposite wall/corner with the child’s table/chairs in the middle of the space. Then in the living/dining, move the sofa perpendicular to the fireplace on the left side of the fireplace with the loveseat opposite, and the ottoman between them. Place the tv above the fireplace…not ideal, but there is no better place and it works if you happen to like to recline while watching tv. Hopefully, the kitchen table/chairs fits behind the loveseat. The low storage bench could either be placed behind the sofa or if it fits, in the front hallway.

I would close the opening between the dining and living area. Then move the couch down and keep the same layout you have now.

I would mount the tv over the fireplace and remove the credenza from this room. I would then move the sofa and loveseat centered around the fireplace.

Some inspiration

I know mounting a tv above a fireplace is frowned upon here but it was life changing for my narrow and long living room with three double opening walls and a forth wall with windows and a large fireplace. Ditching the tv console and hanging the TV will be a great improvement in the flow of your room. you could have the sofas flanking the fireplace facing each other instead of in a L formation.

I agree with HU(whatever) who suggested closing up the wall between the living room and the dining room. It looks like someone decided that "open concept" was the way to go. This fixation on open concept can sometimes cause more problems as you can see here. Why would you want to have a view of the kitchen from the living room?

Add to multiply--adding the wall will multiply the usage of this room. You can then replace the fireplace with the TV and console. Move the sofa to face the TV. This is a general suggestion--if I were advising you as a designer, I'd need a lot more information and dimensions of the space.

Is that FP actual functional? I do agree the open concept is not a great idea in that space . Maybe use what should be the DR for the some of the seating and the play room moved a bit.. I hate TVs over the FP but with a pull down wall mount you could do that here . Maybe use the loveseat as a divider between the playroom and the TV space . The cabinet under theTV has to go for sure .

I like the room and the furniture but the space definitely feels unbalanced right now.

I agree with the suggestions to mount the tv over the fireplace. It's not ideal but it will help balance your room. Then center your furniture around the fireplace. area

I would remove the tall shelf behind the sofa, and figure out a different way to store the kid items. It's too visually distracting and adds to the sense of imbalance in the room. A low bookshelf behind the sofa might work.

The other thing I would do, which I think will make a big impact, is to get a couple of area rugs to help visually define the play and family room spaces.

Just be careful that if you get a pull down tv mount that it can clear the fireplace and still be low enough for comfortable viewing. Your room is very narrow so I don't know that a pull down will work. Maybe?? I also think that because the room is narrow, that floating your sofa or loveseat is not a good idea. To have a nice clearance for a walkway behind it your distance to the wall in front of it would be very close. I think removing your unused fireplace will give you a better flow of the space.

I would like to see the following floor plan:

Locate the larger sofa to the left of the fireplace with a narrow 9" shelf behind the sofa for books, drinks, pics and large art above the console.

Place the tv centered in the opening to the kitchen, since it seems you are not using that opening as a walk thru. With your MCM furniture, back the tv opening to the top of the tv with a low shoji screen still keeping the space above.

Locate the smaller sofa even with the right edge of the fireplace and back the sofa with a cabinet facing the kids' space, making both areas separate. Keep the window simple and with the sheer curtains.

I never mind furniture and sofas in front of a fireplace. It acts as a frame and not as the focal point of the room, especially if it is unused.

Mantles ignoring the fireplace and focusing on the accessories:

For tv in opening to kitchen:

Low decorative screen behind screen

Architectural and open

Simple

MCM vibe

Can we have a floorplan with room, walls, openings, fireplace and window measurements? That would help a lot. What is the length of the couches?

Lots of great suggestions.

Take out fireplace. We did in a small room. Best thing we ever did. Put couch where fireplace is now and tv in corner by window and kitcken. I would think you like the big opening now, because you have little ones.

If you want to keep the fireplace, as someone said above, put the wall back where the big opening is. Open concept is not better.

She has toddlers and it is one week to Christmas. Complain if she doen't come back after New Years, lol.

If you don’t have the funds to wall up the room between the kitchen and the living room, consider getting more shelving units to fill the door way. Hang a very large painting on the shelving unit over the sofa, once you have the sofa centered on that wall. Place tv over fireplace. Remove tv console. Add an area rug to ground the space. Now start editing your accessories in the room. Consider taking down the pink objects near the draperies.

Removing the fireplace is a no-brainer. If you didn’t have one, would you be thinking you need to go out and buy one right away?

Take it away to another room or sell it. This room is too small for it.

Thank you all so much for your invaluable time and fantastic advice and tips. I sincerely apologize for not responding earlier; the days leading up to Christmas with the little ones have been quite hectic.

I've realized that providing a detailed floor plan with dimensions would be more helpful. I plan to take measurements of everything and will share them here later this week.

We've decided to explore the possibility of removing the fireplace altogether. We believe this decision will open up many new options for us (hopefully)

Once again, a heartfelt thank you for all your wonderful guidance thus far!

A gracious comment from the OP.

We have put together a three dimensional rendition for you with some suggestions. We will post them today. Hopefully it is something that you will be able to do by simply moving furniture around. Please give us a little time and we will post them soon. Best wishes to you and yours during this very busy time.

We knew you were busy, especially with little ones. These are exciting times for them.

Here are some more pictures for your consideration.

Here are some pictures of the 3d rendition with suggestions for your consideration. Please note that we try to match your furniture with similar items. Also, please know that only the placement of the furniture and decorations are being presented for your consideration, not the styles, colors, comfort, etc. We put the Christmas tree in the dining room. :-) we will gladly make adjustments at your request. We based our measurements on your furniture but will make appropriate changes when we get the actual measurements from you later this week. Best wishes to you and yours. Hope this helps.

We removed one of your couches. Here you will see, one couch (hopefully the larger of the two) against the back wall and put the TV and TV console on the opposite wall. There are two matching floor lamps flanking either side of the fireplace to provide additional light and balance. We put your mirror over the fireplace to help divide the room and add reflective light. It also takes the place of a window. In this case the mirror is also adding balance to the room. Large wall art was added for additional balance and for fun. In this setting/arrangement the fireplace helps to divide the room for the play area and the living/entertainment room.

In this picture you can see that we removed the bookcase and placed it in the play area. We are suggesting a pretty storage cabinet with doors for the corner where you now have the small, colorful storage shelf. You can never have enough storage. It is also nice to have something you can toss toys and so forth into and close the doors when you have guests coming to visit or just want a place to put things such as blankets, etc. nearby.

We wish you and yours a very Merry Christmas! This was the best ever time when our children were little. So hope you have fun and again, we hope that our suggestions help.

MAE

Okay, this was just us having fun. ;-}

We realize that you made need to leave the bookshelf between the kitchen and living room in order to put the TV on that wall. We are still suggesting an extra storage cabinet in the play area as shown in the rendition.

Here are a couple of pictures with the wall extended or the bookcase where it already is tied into the wall. That allows for the TV and console to be moved into a better viewing location as [previously suggested by one of the other folks.

hope this helps.