We are family of 4, we would like to add TV on top of mantle. Living room is 18'6" × 16'5" , ceiling height is 10 feet.

We want to create a space good for family gatherings, more space for people to seat together. I am open to any ideas and not stuck on recliner or sectional only. Thank you!

Adding a TV above the mantle could result in a stiff neck as it will be relatively close to the seating and may not be comfortable for viewing. Consider putting teh TV on a TV cabinet on the wall between the 2 windows on the back wall. You can then easily add a couch and a couple of side chair facing the TV at an appropriate distance. Put some 2 - 4 comfy chairs on either side of the fireplace for a conversation area.

Looking at your pics - your fireplace is not that tall so the tv above should be fine.

Our tv is above our fireplace and we have a sectional with chaise and ottoman attached as well as two leather chairs. For our family of five we find this excellent for tv watching and hanging out as a family. When extended family comes over it’s great too and we have zero problems sitting on the sectional together. I will say our set up does all come apart though so if we decided we didn’t want the sectional it can be broken apart to be a regular three seat sofa chaise piece and ottoman.

I'm in the no tv above the fireplace camp. Tvs are getting more reasonably price in larger sizes like 77 and 85". Wall mounted at seated eye level is the most comfortable with 4K tv.

If you want reclinging furiture, you need the space to recline, so it can't be against a wall. Configure the sectional for that restriction.