This will take form in your mind’s eye when you are further along in your build. The traffic corridor near the under-step storage and bathroom should be kept open,(it’s essentially a hall). It will be made interesting by art. The back area looks like it has a nice view to possibly center on. Perhaps a game table, or a quiet area to read. It’s exciting to think of possibilities, but there will be numerous other choices and questions you will need to field during the building process. For now, save your focus for them. It looks like a lovely space - the solution will come to you - especially with the Houzz community to help. Enjoy this exciting time.

Waht do you mean upstairs people ? I have no idea if it is lovely at this stage If you want help show the whole floor plan since usually a DR in ner a kitchen which I do not see . Bathrooms next to living space generally not ideal either

Will the room actually be used as a family room? If so, you will want comfortable seating, a place for tv watching/gaming, perhaps a game table. You know how your family operates and what they like to do. So, would keep that uppermost in mind as you are trying to flesh out the room. Good luck!

Is it a console piano or grand piano? Keep it out of the sun for sure. If console maybe it can go in the narrow corridor?

Usually determining how space will be used is determined prior to building. As Patricia pointed out this is essentially a large hallway. It is also broken by doorways, so it will be tricky. Could you show the placement of windows and doors for the stairway landing zone.

Thinking two barrel chairs and a small table in the open space beside the primary bath.

Next to the stairs I would probably concentrate on creating a beautiful space by using art or sculpture or spectacular lighting fixtures or some combination and minimal furniture.