If you/family member likes to lay on sofa to watch tv, this layout works well.
Comfy chair/ottoman or recliner next to fireplace. Provides one additional seat. Maintains entry area with console table and pathway with the side cabinet.

Could also add in a small drink table next to fireplace chair and a coffee table.

With a smaller space I would definitely look for a sofa and chairs that have less bulky arms. It looks like your current sofa wastes 2 ft of length on those curved arms and the chair shape wastes space too.

You could also move your current furniture into the proposed layout to try it out.

Thank you Susan! I like the layout. The furniture i have now is from my old house before I downsized. It had much bigger rooms and a 10' ceiling.

I was thinking about a mid-century vibe for this room. Do you have quality manufacturers you can recommend?

Oh ok, makes sense. I was thinking your furniture looks in really good shape for raising kids and a dog! From everything I see in photos, your furnishings style seems to be transitional/traditional, so I’m not sure how midcentury modern fits there. I think some lighter transitional upholstered pieces in the new layout would open up the room and make it feel more spacious and comfortable and work well with the other furniture, which looks/fits so well in the space. Visit local furniture stores in your area to learn about the manufacturers they carry. Quality stores will have associates with design experience that can help guide you through the process.

I would go with sectional

or in modern style