our house: the living room, two ways

ok people, i need your help. for some reason i am totally struggling to figure out the best way to arrange our furniture for this living room floor plan. i think the issue is that the fireplace is smack dab in the middle of the wall with a window on each side. it forces you to either make it the focal point or ignore it all together. since we don't have a flat screen tv to mount above it, we are choosing to ignore it. so i would love your input, which do you like better?

nice amount of floor space for the kids to play. (please excuse the Christmas decorations. i took the pictures when our decorations were still up. it was the last time our house was this clean and i had to seize the moment.)
with this layout, the tv is SUPER far away. we've had this tv since we got married 7 years ago and it was a hand me down from our brother-in-law. we're not complaining, but at 32" it's more like 12" from across the room. i mean, we're struggling to read subtitles at this point.
also, do you notice that huge empty spot on the wall between the couch and the desk?? yeah, me too. i would really love to get the coordinating Sloan leaning bookshelf to put there, which would also help me get my storage boxes of DVDs out of the garage.

NEXT! ok, i have to admit i like this layout better cause it doesn't make me want to spend $1000 on new furniture. but it has it's own problems. like, the tv is WAY closer, but we're totally on top of it. watching tv for the first time like this was like movie theater action. which is totally an optical illusion because we plainly DO NOT have that status going on.
like our rugs? me too. we got them for free (!) from a friend who was downsizing all his belongings to only 100 items. he wants to own less so he can give more. uh-maze-zing. read all about it here. we probably won't keep them in this spot though, for obvious reasons.
not so much play room for the kids, but that's what there bedrooms are for, right?
still a big blank spot, but less desire to fill it. maybe a plant? for sure.
feeling better about this office area. it's behind the living area. no one wants to see the office, not even in their peripheral. no one.

so anyway. here's a little window into our new home (we've lived here for 4 months). none of our family has seen it yet so i thought it would be nice to give a tour. i'm really hoping my husband's mom will give me her opinion, she's wicked good at decorating and i could really use her help!

if you think something else would look good i'm open, send me a comment!