Remove the nib wall, it is not load bearing and is causing the room to look very dated. Do you use the dining as a dining or is it all the kids area? Place your electric fire place between the two windows, where the heater is showing in photos. The furniture can be “in” the room, not along the walls, as shown in the real estate photos. And gypock or paint every single face brick that is showing!!! But, personally I would make the sunken room into the kids room, and make the formal lounge in the dining room area, and the office in the tv room area. The office then is out of sight lines if people are at the front door.

Example of placement of furniture with your current layout, and my thoughts with changing room usage.

Dreamer’s idea has a lot of merit, imo. You’ve certainly enough ceiling height though, so raising your floor level is an option, if it bothers you and it would broaden your design options. OTOH, sunken floors are having a resurgence, so there’s that

If the whole wall is loadbearing then there will be lintel beams above each opening. You can create new or bigger openings with beams. Likely to be loadbearing where the ceiling rafters hit the wall. Do you want to divide office and lounge with a wall and door and then put electric heater on new wall in lounge? Could create entry to office off dining too.

we originally had the kids area in the formal lounge but the carpet became a problem. Toddlers and crumbs and spills. When the kids are older i want to put the office where their stuff is now and make the formal lounge a proper living room/tv spot.

This is what it looks like layout wise at the moment (arrow being moving office around when the kids are older). tv is mounted above heater thingy. Also contemplating bricking in the window in the living area if that helps make the orientation of things better

Long living spaces can be difficult. How many people do you really need to sit in that area?

What is your actual problem? Is it furniture placement? you are using the rooms in the best way for your family. Furniture can be placed anywhere in the lounge room. As all the above posted plans show, there is plenty of room for desks and tv and fireplace and office furniture. Ignore the externals windows and the small openings in your brick wall. Place the furniture “in” the room, not against the walls or windows. And floor coverings can be changed or floor mats used. Or introduce rules about not eating or drinking on the carpet. There is nothing wrong with the sunken lounge room. I would be just painting or covering with gyprock, all that exposed brick. If the carpet is such a problem for little people, then add hybrid flooring. Open plan is not always the best solution. The only wall I would be removing is that low, non bearing, dining wall. Covering all that exposed brick will make it feel open visually. At the moment the bricks are a physical barrier and a visual barrier. The walls are so busy, you can’t see anything else….

Can you post the whole floor plan, you have an amazing 80's house, I have the same, we opened up between the different levels to make it open plan and love it.

I suggest you have a builder look at your walls to define which are loading and supporting those wonderful ceilings

This is an example at what can be done to make your rooms “less blocky and claustrophobic “, by removing the brick, but keeping the wonderful ceiling. Same rooms in before then after.

this is the whole house. First time living in a house where the living areas are long and symmetrical.

i haven't seen many examples of a fireplace being in the centre of the room with a couch in front of it or to the side of it without the couch feeling like its blocking the flow of the narrow central doorway or the line of slight to the fireplace.

in the event i cant bust open the wall at all, if the fireplace is in the centre, i dont know how to place everything else. I've never had this much space and i dont know how to use it properly.

if nothing is against the wall and is all centred around the theoretical fireplace.... what goes against the wall(s)? would it look naked?

Is the part you are showing us with the large lounge room an extension? The house looks like a traditional 1970-80 4 x 2 bedroom home, or even a 3x1 and the master was the old lounge room, and then a large extension has been added later. Is the entry for guests from the street the one next to the master bedroom? The kitchen is stuck in the middle of the house. This is really not a good floor plan when looking at the entire plan. The open part has been added without any thought to the flow of the home. I would look at moving the kitchen into the tv room or somewhere in those spaces that you do not know what to do with.

Examples of fireplace, tv in the middle of a room. Notice furniture is positioned away from the walls.

Gosh kitchen needs to be in dining room. Shelve the fireplace and save for that work first. I’d prob move laundry to kitchen and use laundry as a little office freeing up lounge Get some one to assess the brick walls. It may not be that hard to remove some of it and will open up lots of options.