Sounds like you have a good plan, call an experienced, recommended, reliable contractor. Maybe he/she can help you with an interior room divider, for the front door direct to lounge problem too. Here are some ideas https://www.houzz.com/products/room-divider-prbr0lbl-pl~l_38829

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!

Generally a sofa faces the TV. Not sure if the room is open at the end where you are standing or if there is a door or wall. You could even use the sofa as a room divider where you are standing and leave a walkway behind and on each side for traffic patterns. I would either mount the a TV on the wall it's on, or find a TV cabinet to enclose it that fits the space. Ballard Designs catalog has a shallow one that doesn't take up a lot of depth. I prefer to hide TVs in cabinets unless that is the only purpose for the space. Mounting them and having them in open shelving makes them dust magnets especially since the electrical charges attract dust. The draperies are pretty heavy and a lot of them. I think the room would look more updated and less claustrophobic with possibly shutters, that could also tie in with the ones hiding the opening on the adjacent wall. If using any fabric at all, I'd use only a valance but the draperies are too overpowering. The fabric on the valance could be repeated in throw pillows on the sofa or an ottoman used as a coffee table.

I think anything those sizes will look completely out of proportion. A small rug doesn't make a room look bigger - it just makes it look out of proportion. A large rug will actually make the room look bigger. The front legs of the couch should be able to sit on the rug. Search 'rugs in living areas in photos' on this site and you can see examples. At the moment what you have looks like a mat not a rug