Design Ideas for Bare Bones Living Room?

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Q: I need help with this room! We received the living room set from my parents, who purchased it when they got married 40 years ago. It is high-quality down and is still in excellent condition.

I love that it is curved. I guess I just don't know what to do with a printed vintage couch. Decorative pillows? What to do with the walls? We love the map (IKEA, purchased a couple years ago). And what about the curtains (we would like some sort of window covering due the street outside being quite busy)? I love the "vintage" look, but feel very stumped in this room as to how to actually pull it off:

I am hesitant to put too much more furniture in here (ie large coffee table) because our sons (2 and 4yrs) play in here fairly regularly, but other than that the room has very little purpose. When we host, we always stick to the family room because this room is next to their bedroom and we hate to be too loud after they are asleep. So, if you can incorporate how we can utilize this room more, you get extra bragging rights! :)

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Regina is an architect who lives with her husband and children in Lawrence, KS. As a LEED Accredited Professional and longtime contributor to Apartment Therapy and The Kitchn, her focus is on healthy, sustainable living through design.