Would go a classic navy and cream , with rich gold accents, like this pic but reverse the wall colour and lounge colour, and with your English lounge choice and decor, it would look refined and classy. The navy would go well with your grey/taupe carpet and the walls, and your window design would lend well to the old Victorian/English style. Just one idea to consider :)

What sort of floor is upstairs, carpet over floor, floor boards, etc... Underlay may work to a degree but it depends on how well you want the sound reduced. I can't see it being an acceptable solution as the thump will still resonate. Insulation between floors could work better when teamed with the underlay but would probably be invasive and you'd still have the thump's resonate.

I had a 2nd hand lovely resort style lounge (cane with fabric) which quickly became pulled and tatty after my 2 small dogs had been using it. The leather lounge & two large leather recliners I have show no damage (regardless of long or clipped nails) and both pets love these. Having a blanket the dogs know is theirs is a great idea especially with leather, as the initial cold feeling of leather means both dogs only want to be on the blanket.

Try Sparkk they print customised fabrics here in Australia. They have collections that work with this aesthetic. Good Luck!