While the space above is by no means a small one, it does offer up one small space solution. See that sofa used as seating on one side of the table? That could be your living area sofa, repositioned when you have guests to dinner, providing extra seating at the table...
We'd love to have such an arrangement in our own home, even if our apartment is the size of this room. But we think this works even in small apartments because it puts the living room sofa to double use.
It eliminates the need for lots of extra chairs that are used only when you have company over. Maybe you have just two or three chairs at the table for daily use. When you have guests over for dinner, simply rearrange, pulling your sofa up to the dining table (or table to the sofa, as it may be). Here's one more smaller-scaled example from House to Home:
Top photo: House Beautiful Kitchen of the Month, December 2006.