I would go online and check out IKEA furniture/ living rooms for inspiration, even if there is not one close to you. Then with road trip it to IKEA or use their LR designs for inspiration. Affordable wall art, rugs, drapes/ blinds and furniture can turn this into a great spot. Right now it looks like odds and ends you have gathered about you.

I would remove the East wall of the kitchen and extend the island to where the wall is now creating lots of counter seating. Then you can use the dinning room however you choose. I would also open up the walls around the mud room. It feels quit compartmentalized right now.

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Hi, you can get in touch with me through my Houzz profile to discuss your project further Regards Ar. Manjusha Adhav - Kamble