This is a great space with lots of potential!

If you put shelves where the black lamp is, I would suggest also putting the same set of shelves on the other side of the TV to help balance the TV wall.

Alternatively, you could put floating shelves on the vacant wall to the left of the TV (first pic) and that will free up the TV wall for a longer entertainment unit when you look at replacing the furniture.

I would add a more commanding floor lamp to replace the current one - something that will take up a little more room. A tripod lamp would look best and you can find them really inexpensively these days from Kmart or Freedom.

With the artwork, make sure all pieces are hung at the same height, and at an average persons height eye level.

To minimise the look of clutter, have all pictures and art in the same frames where possible. Where the Red ottoman is, you can create a nice a wall of family photos all in the same frames.

If you purchase some art, get one nice piece with colours that you love. Then select up to two colours from the art and find some scatter cushions for the lounge.

This will really lift the room without costing a fortune. If you're on a budget, Shop at Freedom when there's sales - you'll be able to find some really good modern pieces that aren't overly expensive.

Finally, Make sure the TV is not mounted too high - Have someone sit on the lounge and guide the person hanging it.

Good luck and remember to keep it simple. :)