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!

You can put the TV over the fireplace, not the best situation but the way the room lays out it is the only logical place to put it. If you could you should add one additional layer on your mantel that could extend it out another 4" to deflect the radiant coming from the fireplace. I would also mount it on a slimline mounting bracket and have the bottom of the TV no further than 4" above the mantle. Ideally you want the TV to be in as straight a line as possible with your eyes. You don't want to look up too high at the TV, it's like being at a sports bar. Also if you can snake up the power and the HDMI from the cable there is a box they make that has both in one so it makes for a very clean installation.

One of the biggest cons is that above the tv is way too high for most people's optimal/comfortable viewing. There are several different opinions about the best height at which to view a tv, but generally when sitting you should be staring at the center of the screen or at the very highest at the bottom of the tv. Unless you have an unusually low-profile fireplace, watch tv standing or are like 6' 6" tall, a tv mounted above the fireplace is going to make for some uncomfortable viewing.

Good that the heat/air system is over the door and doesn't interfere with your decor too much. It appears the ceiling fixture to the right of the FP might indicate that the dining space is there. Put a sofa in front of the FP and two small accent chairs with it, facing each other over a round glass coffee table. Can you wall mount the TV left of the FP? I think the room is too narrow to put the TV above the FP - you'll strain your neck. If you mount it opposite the FP, a sofa and two chairs could work but will need to be small scale - try apartment-sized seating. The sofa could face the window with the chairs opposite it. You could turn to see the fire or to watch TV. Swivel chairs come in handy in such tight space.