Arabella, I agree with stifflersmom. Moving the chair to the corner would add some more space. Plus if the new couch has similar dimensions to the chair, its going to be more crowded once it arrives. Your living room is very pretty. It seems like a relaxing place to be.
Here's my progress so far. I'm at a point where I can go no further. We need a new couch, but I'm still undecided what to buy.

I rearranged the furniture and re-did my bookshelf. I made new pillows as well. Check out my blog for way too much info on them. The painting is by me. Its of my son. The lampshades are covered in fabric that I dyed and stenciled. The table was decoupaged a few years ago. Its not holding up well with a 3 year old who picks at it though, so it will be replaced soon. I had planned on painting or upholstering it, but its kind of wobbly.

Another pillow. Based on the Amy Butler pillow in her book. I hate my entertainment center but it too has to wait. Sometimes I really hate being overseas.

Another new pillow. I made the quilt as well. Its based on a Denyse Schmidt quilt. The mirror is covered in seashells. I'm missing a picture on the right side. I couldn't find a plate hanger at the store. I have a little mirror that will be hung there.
I love being surrounded by stuff that I have made.
I'm going to go ahead and start on the next month's room(s)-dining room and kitchen. My dad is coming to visit so I'm not sure how much time I will have in late February and March. I'm going to finish stuff in my dining room and kitchen. I plan on repainting my canisters, making potholders, and covering my son's table in oilcloth so far. There's always a ton of small stuff too.