Hi, Emilie. Really, you're doing great and the space will continue to get better over time as you live there. I like that you're trying to define the space for multiple uses, but I think repositioning your furniture could open up the space and be more attractive and welcoming.

The room feels like the sofa needs to be against the long wall across from the fireplace, for function and traffic area, as well as for massing the dark and light tones within the space. What a wonderful coffee table! If the sitting area needs more definition, you may want an area rug under the coffee table (large enough to fit under feet of the sofa would be best), maybe in a pattern or the red-orange color of your dining chairs. If you have funds for lamps on each end of the sofa, that would be great, or add when you can afford them.

For your actual question: I'd move the sofa table/cabinet to under the mirror and then see if the mirror is the right height. The mirror is great on that wall. I love how it reflects the light while bringing the colors of your dining chairs to that end of the room! But if you really want to keep the sofa and other furniture arrangement as in the photos, you might try a narrow shelf under the mirror. It could be as long as fits within those end walls or just centered in the space. Could be as simple as a picture rail, painted white, would look really nice and give a finish to the room. (I'd be tempted to try to make a shelf that echos the fireplace mantle as closely as possible in its dimensions and color, even hanging it the same height. If you wanted to add a shelf or two under, they could also be made thick like the mantle, or thinner like plywood would work also.)

I tried to give a lot of possibilities, and I hope some of these ideas might work for you. Repositioning the furniture is a no-cost way to start, then you can see what your budget allows. The room is lovely as is, but it's fun to make the changes that fit your moods as well as your lifestyle.

Also, I have to say that so far at least, you're doing really well integrating kid-space in an attractive and interesting way! Doesn't look cluttered and I like the nice bright colors you've used, especially that great little piano. Makes me want to sit on the floor and play with the kids.

I'm not sure what could go under the mirror as it looks like a very shallow space and anything protruding would block that walkway. If it isn't as shallow as it looks, maybe putting IKEA expedit shelves along that wall would better suit that wall space and you could move the mirror above the fireplace or the couch which I also think should go across from the fireplace. That would open up the room. Maybe then you can reposition that desk and put something more table/storage/cabinet like there for the kids playthings.

I'm not clear on why we are designing around the mirror. Is it permanently affixed? If not, I think it's too small to anchor the wall in that way. It is nice to have mirrors to reflect light but design the room and include the mirror, not the other way around. IMHO

I'm with Akritenbrink. I think it's a little too small for that wall.

Just a quick observation, having the mirror parallel to the windows is just reflecting all that gorgeous natural light straight back outside. If brightening up the room is your goal, you might think about moving the mirror(again, if possible) to be perpendicular to the light.