If I were styling that room I'd add some warmth and soften it a little. I'd go with a beautiful big timber table, to fill the space, some fabric chairs, for comfort (or timber if you have small kids, like me, and need to be able to wipe them down!). I'd skip the rug until they're a bit older, and put in some big pot plants, and a lovely artwork- and voila!!! Have a look at our shop, there are some lovely quality pieces, that would look great! https://www.northhem.com.au/

I honestly can't beat the suggestions that have been given above, but yes, de-clutter the desk area (clock, wastepaper bin), find a large print to go above the desk (this will draw the eye first), replace the desk chair with a nice upholstered chair that fits better in a lounge room something like the upholstered dining chairs that are popular at the moment http://www.westelm.com.au/mid-century-upholstered-dining-chair-velvet-h2338 (if budget is tight, even Kmart have similar?). Finally, I do think the warm earthy tones of the walls/carpet/curtains are jarring slightly with the cool white & aqua tones of your furniture. Possibly repaint the walls, ditch the cream curtains? The carpet you probably will want to leave, but I think these other colour changes would probably make enough of a difference. But that outdoor area is so lovely, I would try to bring that in, with a few indoor plants in the corner, plus mirroring some outside. Then also potentially a mirror on one of the adjacent walls will bring in light and reflect the outdoor view into the room. I wouldn't stress too much, it's a great room and settling in, tweaking and 'nesting' takes time!

If you are going to seat 7-9 people on your couch it's looking a bit like a comedy....and very uncomfortable! You need many separate smaller couches and armchairs grouped around a central area, or something.

Dear Mary, a track on the ceiling with S-fold heading would look good in this room. It would be terrific as a sheer, but remember that at night people can see in when the light is on - during the day, it will be private. As KK1000 said, a blind in the reveal will make the area private when required, or have lining on a separate track. The fabric doesn't need to be plain, it can include design in the colours you already have in the furniture, rugs or artwork. There are fabulous coarsely woven sheers at the moment and a few samples follow: Most curtains at the moment are falling from the ceiling, as it makes the room seem larger and the S-fold looks good from the outside, rather than gathers - just look about in the meantime, you will see what I mean. Pelmets are making a come-back, but might look like an apology with your leather furniture, unless they are relatively straight and fit up to the cornice.