On a budget I would just add identical frames with pictures around the TV. 2 on the sides and 4 along the top. I like the clean lines of the current TV stand but it would look better against your floors and with your furniture if it was painted a dark brown. I think a round side table next to the chair would look very nice and tie in with the ottoman. Other options would be to create a built in for the TV with shelves on either side. Or you could also add an electric or gas fireplace and put the TV above the fireplace.

We had a table with benches (like pews rather than a straight bench) when I was growing up for a family of five with often visitors and in a small dining area (but with walls on three sides). It worked well and I have fond memories of being squished up with my brothers (and creating havoc) or grandparents. If you push it against the wall until meal times, that might help with the baby gate access? This way you can still sit at it casually on the out side and just pull it out when you need...just a suggestion :)

I'd consider putting the corner sofa and TV stand in the dining room, moving the stand-alone chair and footstool and tall lamp near the stove as a "reading nook" and placing the dining table in the living room, leaving enough for a walkway from the entry to the current dining / possible living room. In terms of the actual furniture, everything other than the colour of the dining chair fabric looks pretty good. I would start by decluttering and removing anything that isn't functional or which you don't find aesthetically pleasing. I'd personally remove the mirror in the bar as I don't think it gels very well, the tiny framed art near the stove, the art on the wall near the TV as it's too small and hung too closely and the drum kit (unless the drum kit is used on a daily basis). I really like the Marimekko print and, IF you like it, then I would use it as inspiration for adding colour to each of the rooms, possibly even a "feature" wall using the bright blue from the print (although I'm not a huge fan of feature walls). A few minor changes may also help, like replacing the blown bulb in the wall sconce, storing the ironing board somewhere else and taking down the "hanging" glasses in the bar area as they're visual clutter right at eye line height.

Your industrial style lighting is at odds with the glamorous pendant for the dining room, and will detract from this feature. Your kitchen will be dark as it is a long way from a window for natural light. I would actially consider installing a Velux skylight above your island bench to bring some light into the kitchen. I would make any pendants above the kitchen bench as neutral and simple as possible so they are easy to clean and detract from the dining pendant. If you are going to include recessed downlights then do your research on the LED fittings that are sealed at the top to prevent heat loss/gain from the ceiling space if you are a single storey at the rear. Make sure you have suitable dimmers on all the light sin these areas so that you can control the amount of light for different functions. Best of luck, Dr Retro of Dr Retro House Calls