Now it's beginning to work! Luv the rug! A few more red showstoppers, and I luv the post about matting your family pic, and larger frame for it. Looks like you might be a bit uncomfortable with the great post idea of moving your sofa out into the room away from wall. If so, could you accept putting it diagonally from the entrance doorway, across that corner where it is, stopping at the edge of your window? That's a bit of a move outward, still can see the fp and tv, and show off your new rug, which could go diagonally in front of the sofa. Then, if you like that, after a while you could move it on out as Deb K suggests. Sometimes intermediate steps are more doable for us than those big changes.Same with painting; if you could first paint just the fp wall, then later paint other walls...seems some color would really make it more homey. Would you cosider a quite contemporary fixture for the light in the center ceiling? Maybe a bit of red could go there!

I would suggest you take out the cabinet that is to the right of the stove and use it elsewhere in the house -- perhaps in the bathroom or dining room with a hutch above it. Then, I would suggest you have someone install a lazy susan cabinet in the corner between the sink counter and the stove, meaning you would move the stove down a bit and have a small cabinet/counter top to the right of the stove. I would suggest you have the cabinets refinished in white and then paint the walls a pastel you like. If you would prefer white walls, then add white-painted crown molding and paint the ceiling a light neutral blue, such as Sherwin Williams Niagara Falls Blue. Then, I would suggest you choose a favorite accent color and use this sparingly in accessories like towels, pot holders, small vases or floral arrangements, and a valence above the triple windows. For a genuine 1940s look, you might have white ceramic square tiles with a rectangular red border installed as a back splash behind and above the stove. If you are replacing counter tops, I would suggest a light color such as white with a beige or light grey vein or striation for some sort of pattern. You might be able to find the same color and design in floor tile OR opt for a wood floor as another poster suggested.

I would wait for the rug, until you have the shutters up and your furniture placed..it may take on a character of its own and you'll want to compliment. My first thought though was to coordinate with your kitchen and incorporate some black, with a black/beige stripped rug, which would be fun with the wallpaper and perhaps paint your chairs black, add the shutters and you could paint the window trim black and add a large black chandelier.

Get the professional sander guys in to repair the living areas and kitchen but don't go too dark with the stain as it will kill the lovely grain in the matai. I'm thinking a couple of tones richer than the timber knots showing in your photo, definitely no yellow tone at all. In NZ stepping on to carpet especially in a kiwi winter is so much nicer than a cold floor board shock!!! A nice area rug for the lounge and you're done.