I have too many questions. What is the main purpose of the room? I can see another living area though the doorway. What is on the fourth wall? do you use it in the day, at night, and normally how many people on a daily basis. What are the gatherings for? To watch tv, have large meetings, activities in the open space. Do you need some intimate spaces - With the current layout you can really only talk to the people on the same couch as you. Think about how you really use it regularly and layout to suit. Definitely missing some tables and rugs. If people are chatting in groups, create some more intimate zones. Eagle needs company, on that size wall maybe two more complementary pics that size, or to be feature of a smaller zone. At least move him to the right on that big wall. Mirror, I do love the mirror but - sideways over a fireplace mantle, in an entry or upright in a bedroom, It's not needed in a large living area unless you all like standing in front of it. The urn- what is its purpose? It looks like it's the uncle that no one really talks to and hasn't gone home yet ;). Maybe the hallway where he can be a standalone feature, that people can say hi to on their way past, supported by a picture on the wall to add interest. It doesn't cost anything to move some things around, so give that a go first.

I would consider getting a corner/modular sofa and putting it in the bottom, left corner of the lounge room. I would put the TV on the shared wall between the lounge and kitchen, but with a "swivel" arm so that you can angle it when watching TV from the sofa. I know that the sofa will partially "block" two big windows, but I'm not sure the viewing distance is ideal if you have the sofa opposite the TV and this also means that you are left with a bit of dead space at the other end of the room while the "entrance" is very crowded. Alternatively, depending upon how you view TV, I would consider having two sofas opposite one another and placing the TV on the far wall between the two big windows where the console and painting is now. Of course, to view the TV you would then need to lie back on the sofas and if more than two people want to watch TV at the same time, then they would need to sit on the floor in front of the TV. Good luck. It's a tricky layout!

I would suggest hanging a large moroccan woven fabric or mat, just use a length of dowel along the top edge, and hang it up. It would add great texture and also a casual feel to the room. Dress up the couch with a bunch of patterned cushions and a bolster moroccan style. A silky fabric sun filter curtain would finish off the look. https://nz.pinterest.com/pin/299911656409300053/ https://nz.pinterest.com/pin/405675878916401870/ https://nz.pinterest.com/pin/431219733049382426/

if the alcove doesn't suit your style it should be relatively easy (subject to load bearing) to remove the nib walls and create more flexibility for furniture arrangement...a carpenter, handyman and/or plasterer should be able to give you a quote