Space Kit's Profile

Kate-

3 thoughts come to mind here. It would be easier to suggest things with a floorplan beyond what you've provided but here are out thoughts. The last two also assume a budget that you might not have currently, perhaps they would be long-term plans.

1) Abandon the idea that the living area must be centered around the hearth. There is a common perception that the living furniture must face the hearth. If the hearth-furniture-circulation relationship it's not working for you then move the furniture to the other side of the living room. With the size of the room you'll still get to enjoy the fire but that will free up the circulation you desire.

2) If possible (structurally) removing the wall between the living area and dining area might give you some added room in the living area that currently constrains you. Based on the photo the dining room looks proportionally large relative to the living area. If you can integrate these two rooms the living area will seem larger. (There are overall architectural issues of the "bones" of the house, an open plan might not would work based on the overall architecture of the house.)

3) What about building an entry foyer onto the front of the house? It's a radical idea and it's hard to say without seeing the rest of the house. But it seems a fundamental (and unwritten) problem is that the front door opens directly into the living room. Adding this foyer structure could make the living area feel more cozy.

Good luck!