This arrangement works much better, but some adjustments are needed to make it work. First, the fireplace grouping needs to be tightened. It crowds the dining area and you need a passageway behind the couch. Turn the rug lengthwise, parallel to the fireplace. Pull the large couch about 2 1/2 feet closer to the fireplace, and place the two chairs and loveseat on the ends of the rug, and pull them closer together. This will give you a more intimate conversation area, and not impose on the other areas of the room. Remove that floor lamp from behind the couch. If you need the light in that area, put it by the fireplace. Also, the stereo system on the mantel needs to find another home. Maybe it can go IN the fireplace instead. At the other end of the room, I think the arrangement would look better if the seating were rotated 90 degrees. Keep the rug and coffee table in its current configuration, place the sofa either facing the window or with its back to the window, and put the two chairs opposite it. Finally, the dining area. Now that you've moved the big leather chairs, you should have enough room. Your rug is too small. It should be big enough to give you at least a 2 ft. border all the way around when the chairs are pushed in. And it's a really beautiful table; please uncover it. I can't see what kind of lighting that area has. It really needs a pendant or chandelier hanging directly over the table.

I think a comfortable distance between the island and the counter is around 42". It seems that you have only 30" between your cook top and the counter. I might be a little too tight. The wall between the entrance and the kitchen could be 4' long instead of 6', you would then be able to move the island a foot which would give you more room between the cook top and the island. Could you switch the location of the toilet and vanity in your dad's bathroom so your enter facing a vanity instead of a toilet which is a lot nicer.

I think you should stay with a simple pattern for draperies. Possibly a pattern incorporating the white trim and warm yellow walls. This would be soft and understated and something that you wouldn't get tired of easily. Other colors could be introduced with accessories.

Have you ever thought about floating shelves? I think pairing a few floating shelves together would look great and would free up space in your living room. I really like the Eugene floating shelf from Bryght and I think it would compliment your existing pieces. http://www.bryght.com/product/160/eugene-cocoa-shelf