How To Furnish Small Living Room with Lack of Usable Wall Space?

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Q: We've just bought a beautifully-renovated home outside of Philadelphia but are completely stumped as to how to furnish the living room. It's a 14'x14' room, which you walk right into from the front door, with no usable wall space, as there's either an entrance to another room or a closet, fireplace, and stairs on every wall.

Also because of this, there needs to be enough walking space through the room so we don't feel like we're constantly walking around intrusive pieces of furniture. I'd like to use the room as a parlor — an area to either entertain a friend or two, or sit in front of the fire and relax. I've considered a tailored love seat facing the fireplace with maybe 2 upholstered stools across from it for additional seating, or maybe 4 comfortable chairs facing each other with a round coffee table in the middle. Any ideas for arrangements that would work?

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