Make it a sitting room by floating upholstered chairs arranged around a round coffee table. No sofas needed since you said you have a formal living room. This is a much friendlier conversational arrangement. Also consider setting up a bar in this area.

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Anchor the chairs on an attractive patterned rug.

Let us see why people don't congregate in the living room.

Do you want people in the other room?

If the answer is 'yes', then set up a table in that room with nibbles and drinks.

I don't remember if it was Gustavus Adolphus or Charles XII, but one of them said 'keep your lines of supply short'. It was meant as military advice, but applies equally well to parties.

I need to see a to scale plan of the whole level of the house then I can figure out why this space is inviting guests. My first step would be to do the same flooring in there as all the rest of the wood floors. If you want modern then new furniture style for sure . The FP is in an odd place and seems to not be functional so why not remove it If you likke the idea of a fP get an electric one and place it where it would make sense like on the back wall maybe where the 2 pictures are . . Please post the floor plan here jpeg format in a comment . Make sure every measurement is clearly marked and all windows and doors DO NOT start another post all things related to this one no dealt with here in comment s.

For starters continue the hardwood.

Of course the same flooring in this room would definitely be a plus! But if this is not in your budget, replacing the furniture could also make this room more contemporary and inviting. I have no idea of what colour scheme you have in the adjoining room(s) but here's an idea showing a coffee table with 4 armchairs since you already have a formal living room.

Is there a way to remove the faux fireplace mantle? It’s creating a focal point that isn’t a real focal point and throwing everything off. You’ll probably need to touch up drywall and repaint, but it would be worth it.

I would start by removing the clock. You don’t want your company saying - Uh... time⏱ to go!!! :)

Art in that spot could be nice. Etsy.com is a nice resource for art. All types - photographs, posters, prints, paintings - including some originals. Here’s a link with some art nouveau posters: https://www.etsy.com/search?q=art+nouveau+posters&ref=search_bar

It seems you have electric right there - have you ever used an electric fireplace insert for ambience? Or alternatively, you could use some remote controlled flameless candles.

You said.............

"Hi, I need help finding the right decor to fit this , a room similar to this . Visitors always seem to flock to that little space instead of the other formal living room (which isn’t pictured). Any.........

You show YOUR two rooms. The room the guests flock to, and the one they do not. You take pictures of both all angles and you upload as JPEGS. First.........you do that.

YOURS, not someone else's.

I was confused by that language, also. But I am assuming this is your space (?) Is this the “small space” that people tend to “flock” to??

If so, in addition to art, maybe a couple of velvet pillow covers, and a coffee table.

If children in the space, an ottoman style coffee table is good - and it’s also a nice style, in general.