In the next section you will find my ideas for changing the layout of the main floor.  I wanted to also give you some options for the living room as-is, if you decided to keep the current layout.  Here are some ideas to make the space work better for your family:

I would probably leave the rest of your furniture as-is because I think the placement around the fireplace is as good as it can get. The only thing I would change is maybe the placements of some side tables/lamps.  I think changing the placement of the tv will make the room feel so much bigger.  I would either place it above the fireplace or do some kind of built-ins on each side of the fireplace and put it on one side (you may have to get a smaller tv for these options I'm not sure, you might also just be able to switch with the tv downstairs).  I love the overall feel of this space above and it reminded me very much of your style.  I think we could really update your living room and give it this feel with a few new pillows, printed rug, lighter curtains, and maybe some new lighting.  We could also completely modernize the mantle are with some kind reclaimed wood/shiplap/ or built-in like this. 

I also love these bookends and the dark gray color of them.  We could definitely add a modern touch to the space with some gray tones too.  I don't know if you have considered possibly putting down some hardwoods or laminate in here but that would also really open it up and make it feel fresh and clean.  

Here's one example of the built-ins with the tv off to the side.  If you mount it on the wall you can use a special  mount that pulls out from the wall and can swivel from side to side so you can adjust it to see better from all parts of the room.  

Some more gray tones that I love and I really like how modern the moldings and trim on these built-ins and fireplace feel.

One more built-in idea- I think possible a lighter color on the walls or at least on the back wall like this (maybe some ship-lap there?) would brighten up the room and make it not feel so closed in.  I also think switching out your curtains for something lighter and more airy would make a huge difference.  You also have room for some larger side tables beside the couches (maybe a coffee table or an ottoman too?).  Once I hear your feedback on this space I'd be happy to pick out some more specific items/furniture/curtains/paint/etc.

This first option focuses on expanding your living space and opening it up to the kitchen.  The half bath would be moved to where the hall closet is and we would also probably need to bump it out a little into the office.  To make up for the lost hall closet, we could add some kind of built-in or double closet in the office.  Of course all of these options would be something we would need to discuss with a contractor to see if it's even possible (I've learned just about everything is possible but it just might be too expensive to be worth it!).  Usually you can open up any wall but there is a possibility that you may need to have a column or two if it's load bearing.  Either way it would still make a HUGE difference in opening up the space!  I put the entrance to the half bath from the living space because I thought that would be the most practical since you will be in that area the most.  You could also keep the entrance in the hallway (where the hall closet door is now), or if your husband also wanted access to the half bath, we could possibly add a second entrance from the office too!  Keep in mind that we can combine any ideas from these three plans if you like certain aspects of each! 

The second option was my initial idea that I discussed with you at your house.  Opening up the wall between the office and the living room to expand your living space and then move your husband's office to the old dining room.  The half bath would stay, but I would hope to take down the entire hallway wall and hall closet too so it would be completely open in to your living area when you walk into the front door.  I also added a closet/built-in on the wall to make up for the lost space of the hall closet.  I can't remember exactly what the wall/opening is like from your kitchen area into your living area but I would hope to make that completely open so that you literally just leave the floating half bath in the middle.  Once again, depending on load bearing issues you might have to have a few columns here or there for support, but the impact of the open floor plan would still be amazing.

The third option is a little bit of a smaller change if you wanted a larger walk-in pantry to replace your dining room.  This could of course be combined easily with either of other plans too if you would like.  I assume you don't want to walk in the front door and look into a pantry, so I would close off the doorway to the left when you walk in the front door.  We could set this up like a cute little entry way nook with some built-ins, a bench, and storage.  Next we would make a larger case opening into your new pantry from the kitchen (eliminating the little kitchen desk space you mentioned).  You would have the entire old dining room for a large pantry/storage area.  We could do open shelving, built-ins, cabinets, literally whatever you want!  You could also keep a large table/island in the center that you could all use as an extra workspace/craft space if needed!  You would be able to use your old pantry closets for any kind of storage you needed or we could remove them and just open up the room a little more (or remove them and do some cool open shelving for your kitchen).

This is what I'm picturing if we closed off the entrance to the now dining room to make it a pantry- add some kind of nice entryway built-in so it feels purposeful and like it was meant to be there.  

One more example of an entryway built-in and it even is at the bottom of the stairs just like yours would be.

The next few pictures are some inspirations for a pantry room- just some different ideas for shelving, storage, etc.  We can do anything you want in here whether it's open shelving, cabinets, all reclaimed furniture, or a mix of old and new.

Since you have such a nice size room for a pantry you definitely have space for a large work table/prep space in the center (like an island).  We could use an old piece of furniture for this or have something custom made too.

We could easily put something together like this with IKEA shelves or something similar.

A more finished look with countertops and cabinets.

Love this bright and fun look with wallpaper, shelves, and cabinets.

Some open shelving- a little more industrial style.

One more pantry inspiration.

And even if you decide not to do the pantry room, you could still add some more pantry space by turning that little office nook in your kitchen into a section of open shelving- see above and below for ideas.  

In your oldest girls room, if possible, I think it would make a huge difference to center the bed on either wall with a nightstand or nightstand/table on each side- so that it is the focal point of the room.  We can center some artwork or gallery wall above it, using many of the cute prints you already have but just grouping them together.  I'd do a white or grey pretty, soft curtain- I also listed a few curtain options at the end of this section.  I think that the desk in her room might be too big for the space right now and it might be better to turn that little nook into a reading corner or some kind of play area.  That's just a suggestion, as I know she will probably use the desk when she's a little older and you could always add it back in!  The furniture in the baby's room is pretty much set exactly as I would put it (maybe tweaking a few small things but none of the large items).  I'd love to do a statement wall behind the crib with some fun wallpaper, gallery wall, giant artwork, or something similar.  We also have a lot of room on the other walls for some different things whether it be signage, book ledges, chalkboard wall, etc. (see some of my ideas below).  Below are some inspiration photos I have gathered- I'll make notes below each one with my ideas:

I love this adorable gallery wall for above either of the girl's dressers on an open wall.  We could easily put something like this together with lots of different prints and different sizes and colors of frames.  I also really like the printed rug and pouf.

I love this little play area and the book ledges on the wall.  I think that might be a cute way to decorate one of the walls in the girl's room.

Another fun little reading nook/play area that I loved.  Made with two matching bookshelves with draped fabric above and some lights hanging down.

I love this bright printed rug and definitely think you could do a rug even on top of your carpet.  I also love all the fun colors and book ledges. 

I really love this idea of a chalkboard wall with wallpaper border at the top!  Could be fun to fill an open wall in either room!

I really love the simplicity of these distressed wood organizers and think they would add such a modern touch to your older girl's room and she would be able to use them for years to come!

I've always loved this idea for wall art in a girl's room- enlarging vintage paper dolls and framing them for a gallery wall look.  We could also do this with pages from vintage children's books or coloring books too!

I love this wallpaper statement wall and think this would be perfect in the baby's room on the crib wall.  We could also do a cute little painted monogram in a frame like they did here above the crib.

Another cute idea for filling a wall: a collage of vintage chalkboards!

I thought a little molding like this with some soft, draped curtains might also be a cute focal point over the crib.

Love the simplicity of this room, all the white and minimal decor.  I also like the wall of floating shelves in the corner-perfect for trinkets and toys.

Love this polka dot wall, artwork and tassel mobile (I could easily make something like this too!).

Maybe my favorite room of all- love all the soft neutrals and pale pastels, bunny wallpaper, and beautiful printed rug.  

Another alternative to wallpaper- this is a painted print made to look like a floral wallpaper.  I could easily duplicate this too!

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Love these polka dot printed curtains and the pretty sheepskin rugs.

I love the addition of the dark colors to this room- they look so pretty with the pale pink, white, and green.  I love this color scheme for your oldest girl's room and it's definitely something she could grow into too!

I really like this rug and the gray, gold, and pink color scheme.

So many things I like here: book ledges, sheepskin rug, floral wallpaper, and pretty chandelier!

Love this color scheme and the modern flair.

Another wall art idea that I could made for you- large letter made from faux florals!

The first thing I noticed when starting to work on this basement floor plan was the placement of the bar and how much room it is currently taking up in the basement.  Because of the laundry closet and back door, there aren't many open walls in the back part of the basement , which you need for a sitting area around a tv.  I know my husband would not want me to downsize his bar and I'm sure yours doesn't either, SO my solution (and I think this would overall make the basement feel MUCH larger), would be to relocate the bar to the back of the room and move the seating area up to the front.  You would still have plenty of walking space to get to the laundry and overall I think this layout would feel much more complete and pulled together.  You now have tons of walls to work with to create a cozy little seating area and you would still be able to see the tv from every part of the room.  I'd love to create a focal wall for the tv, maybe a built-in of some sort (which would give you lots of extra storage!) or a reclaimed wood/shiplap wall.  I also think you could then fit either two couches or a sectional with a nice bar-height console table behind them for extra seating (see inspiration photo below).  This would be a great space for the kids to play or color on, to fold/sort laundry, or entertain too!  Finally I also believe this will leave us a good size spot beside the laundry to either expand the laundry closet or add some kind of extra storage cabinet/closet for toys/workout equipment.  If you want to go all-out, some wood floors (or laminate floors- I would actually recommend laminate because it looks just like wood nowadays and its super durable) would make the whole basement feel lighter, brighter, and larger. See below for some more inspiration photos and my ideas for the laundry closet: 

This is exactly how I'm picturing the layout of the sitting area if we were to move it up front.  I think you would use this so much more and hang out in the basement a lot if you had a space like this!  I also like the light paint to brighten up the basement and the addition of some recessed lights.

Another similar sitting area that I love the overall style of.  This is so light and bright that it doesn't even feel like a basement (the recessed lighting is a huge part of this) and I love the wood wall behind the television.

This photo stood out to me because I noticed the large wood beam in the center.  I thought we could dress up the lower part of the ceiling that is sticking out in the middle of the room (where the HVAC is running) by wrapping it in some reclaimed wood so it looks like a beam instead.

Another amazing light and bright basement- I love the built-ins beside and below the tv (these would be super easy to do and that floating cabinet below the tv is from IKEA).  I also like the ship-lap behind the television mixed with the wood shelves and touches- this would be a great option to keep the space light and clean.  I also love those large black and white photos of the kids for wall art down here.

One more example of what I'm picturing for the table behind the couch with extra seating.

I also thought these built-in shelves around the couch were a great way to make the room feel finished and homey.

I also thought about making the bar area a little different and doing a darker color to accent this area and make it a little more masculine.  I love the way this bar is styled too.

Another bar inspiration- I'd love to do some larger, more uniform shelving behind the bar and hang some pendant lights over the serving area too.  A mirror might also be a nice addition to open up the space and make it feel bigger.

Another thought I had to save space was to combine the bar area into a flat layout by pushing the bar against the wall and then doing the open shelving above it (instead of having the barrel bar floating in the middle like you do now).  Above and below are examples of kind of what I was picturing here.

One idea for shelving in the laundry closet- these wrap-around shelves would give you so much room and we could organize everything on them in baskets/bins /etc.  I also think adding a little wallpaper inside your closet or a pop of bright paint would make it feel fresh and cheerful!

Another super neat and clean laundry makeover and I think you'll have room for even more shelves/storage than they have here.

I love this combination of shelves and cabinets and the skinny shelf right above the washer and dryer.  I had a shelf like this in our laundry room at the old house and it was perfect for keeping things that you need within easy reach.  A few mounted cabinets would allow you to have some storage that was closed to hide things that you don't want out in the open.

Another great idea to maximize your storage space: using the back of the doors for extra storage.  I know we discussed doing a sliding door but this is one advantage to keeping regular doors too!

I love this combination of cubbies and hanging space and the subway tile in the back!  We could definitely add a small wall of tile if you wanted to make the back wall stand out.