I actually think you are on the right track with your colour scheme of browns and blues - see the photo I've attached that has a 'spa and gold' colour theme (found on 'howtodecorate.com') your lamp would tie in with this colour theme, and your sofa is 'gold'. This colour scheme looks elegant but also relaxed and I think would suit the style of your house. Would you consider painting your wooden panelling a pale blue? This would add the weight to the lower half of the room that Sian mentioned and add subtle colour. From what I can tell from the photos, it should work with the wall colour, although the walls could possibly be a bit lighter. I would move the mirror to above the fireplace (I think perhaps it's too large where it is) and add some artworks to the walls (in gold frames). I agree that a coffee table would be good. I think the rug you already have will work if you just add some some cushions and throws in creams and blues to the sofa to tie it in. If you purchase an arm chair, I would suggest it should be a pale cream or coffee colour as per the picture. The tv unit does look quite dark, it might lighten the room if it was a paler colour - perhaps you could simply cover it with a material slipcover in a light brown fabric which would also hide the contents, that would look more elegant.

It will be very expensive. No will tell you a price without seeing it physically. To remain slimline and give you your open space you will need to get steel work. Redirecting loads, demo work, wall and roof reno then getting back to a liveable interior will be in the tens of thousands. You need to get a builder to give you a price. Also aim for at least 5 different quotes. Good luck.

Your design scheme has a very traditional European feel. I would continue with this and look at a couple of Louis chairs. The link I've attached shows one with a mix of rattan with an upholstered seat cushion. You can also get them with an upholstered back and arms. However I quite like the rattan for contrast so it's not too matchy matchy with your sofas. http://www.canalside.com.au/productimage.php?product_id=115&current_image=1 You could then add a scatter cushion to the chair. Have you thought about also adding a couple of scatters cushions to each sofa, in a silk or silk like fabric. Check out Kaz's Samara range. Not sure what colour to recommend as I can't see your wall colour clearly but black goes with most colours. Oskuee's rugs are lovely, just make sure the colour ties in with your colour scheme. As you have plenty of dark timber in the room already, consider a glass and metal coffee table and lamp tables in a gold finish. Gorgeous crystal or mirrored table lamps and an ornate gold framed mirror over either the chairs or the sofa to finish off the room.

Ok, I see ...one possibility would be to retain the unit as shelving where it is and wall mount the tv on the adjacent wall so that you can optimise seating arrangement. Otherwise I think you are on the right track, a circular rug would work, maybe a couple of mid century chairs might look nice, you could put some trailing plants up high away from your little one, maybe a basket or two to keep toddler clutter in check would go with an eclectic kind of look. If you move to a larger space in the future, mid century chairs would be easy to pair with a couch.. I think try and bring as much storage as you can to keep the space manageable.