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 see a window there... good! Is it facing north or which direction is it? Are the doors & trim throughout the house all dark brown? Light doors & trim would help alot. Lighter happy paint colors, such as butter yellow or limon walls would bring a sunny warm fresh feel to the room. Try some punchy colored feature walls as shown in Manon's above photo (thanks Manon). Get new furniture & some fun colored art & accessories, everything's looking very dated. Better lighting & a tall floor lamp that spreads light across the ceiling or corner. Lighter drapes (with grommets) down to the floor would help OR Roman shades or 2" faux wood blinds covering just the window would modernize the space and give you more wall space. New flooring in updated colors such as white-washed gray driftwood. Designate areas or stations in the room for different activities, such as floor games in one corner with colorful interlocking foam floor mats, comfie seating (bean-bag chairs) for movies in another area, table & chairs for table activities (coloring/puzzles/games/crafts), etc. Are your children boys or girls? That'll make a difference in what you choose and how you put it all together.

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.

Thank you for your comments. I really appreciate your help. I think we are on the same track. The rugs I have brought home have fought with the terracotta colour plus the busyness of the small tiles. I did come across this picture on Houzz, which I think looks good. What do you think? It would need some of that burnt orange from the chair upholstery as well as the aubergine to tie in but I liked the dark border line, it matched with the grout.