I'd mount the TV on the sofa wall.

get an area rug, center it on the fireplace. Move the sofa to facing the fireplace. chairs facing the big wall. You can then see the TV from the kitchen.

Depending on where you place the sofa, a table behind is a nice spot for collectibles, etc.

https://www.wayfair.com/school-furniture-and-supplies/pdp/wade-logan-latrissa-moroccan-flatweave-wool-charcoalcream-area-rug-w005363175.html?piid=1076655347

TV on sofa wall with articulating arm. Sofa across from fireplace. You will be able to angle TV towards sofa. Two chairs across from TV.

The space is not large so purchase less bulky furniture. No rounded arms. Narrow arms that you can see through and are not the same height as the back of the chair or sofa. Exposed legs. No skirts.

May we have some measurments of the room. If so we can make some suggestions based on the measurements. Thank you in advance.

This is one space where a small scale sectional would be ideal.

A to scale floor plan is a must done on graph paper to make it easy. Right now that TV needs to be on the wall where the sofa is so start there with some strorage , a bit of display and the TV at proper viewing height . When you post the plan show every window , the FP and all the openings and where those lead . Every measurent clearly marked too Post here in jpeg formt in a comment. The wall I mentioned for the TV can be made to look custom with Ikea pieces from the Besta line

If the sofa will fit, you might try the sofa floating on a rug facing the fireplace. Then place the accent chairs where the sofa is now. Otherwise we might suggest looking at 4 swivel chairs around an ottoman. This would allow people to converse, have their own chair, and turn it how they would need to in order to talk, or watch TV.

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You room doesn't feel cosy now because it is very open and because of the high ceiling. Not much you can do about the high ceiling, but one thought is to cover the railing with a half wall to eliminate the eye-catching railings that draw the eye up. It would also give you a bit more sound privacy upstairs.

TV definitely needs to go where the sofa is now, on a long low credenza. I'd do that first, and face your existing sofa and chairs towards the fireplace and TV, giving a virtual wall to the room. You may not need new furniture.

Move the dog bed elsewhere so that there is a clear line of sight to the door. Consider removing the wall shelf near the dog bed which takes up visual space and seems to be a catch-all.

I think your fireplace height will look fine without the large TV above it. Add a nice piece of art.

Eye-level lighting will also help to make the room its own space, and keep it cosy. Floor lamps, end table lamps, plug-in wall sconces. No light on the fan, or leave it turned off. Leave the overhead lights off. If outlets are lacking where you want them, there are battery operated table lamps.

If your existing furniture seems to work, a rug is the next step. If you feel you need new furniture, buy the rug first.

I'd paint the dark door to match the blinds. In combination with all your blinds, the high contrast doesn't look good. Lots of straight lines and rectangles.

Would you consider adding some colour to the room? Other than the hardwood floor there's not much colour, and it would add some warmth. A mossy gray-green would look good with your floors. Wall paint, carpet, cushions, narrow non-operating drapes.