Is this a dining room or living room?

The upper picture is a living room, the lower picture is a dining room in a custom home where I found the wall paint color. The upper picture is my space. We have a 4 and 5 year old and there is a huge built for tv across from the bay window. I want this space to be kid friendly...but I am dying for a little "space" from the kids too. I want a place for them when they come in, but to be adult friendly too! This is a second living area.