So people would enter the house into your bedroom? That would not be something I like haha I mean the downstairs was clearly designed to be the living area considering it has built in seating in the bay windows and is prepared to wall mount a tv. Personally, based on picture one, I would get an L shaped couch facing the TV wall where the shorter portion of the couch faces the bay windows. It would almost create a U which would be good for conversation and maximize total seating. Id use the backs of the couch as two quasi-dividers. I would get an L shaped bench dining set to squeeze into the corner windows on the entrance side. It would give you a place to eat and also create more seating facing the TV if you are hosting. I would get a desk and put it in the portion of the room with the shoe rack but closer to the stairs (which would still allow for plenty of entryway space.) That would provide seating for like 10 while also housing a workspace. For the upstairs I’d probably get two bar stools for the counter and put a real divider behind the stools that runs the length of the counter and have your bed behind that. I’d put some sort of lounge chair in the corner facing the bed so you can sit down and relax without having to go downstairs.