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Try the TV in front of the window, it appears to be dark enough when the drapes are closed anyway. I like silibran's suggestion to hang new curtain panels higher; hanging them just under the ceiling would make the room look taller and a pattern or horizontal stripe would make the room look wider too (a perfect square)!
Place the sofas across from each other, add a soft low-pile shag rug in between them, and horizontal prints above the sofas. Match the frames or the colors used to tie them together, using larger scale prints would balance out the size of the sofas.
Paint the wood tables to match, to add some personality.
don't discount propping one of the couches on it's end, while it may lose some functionality, it will take up less floor space and add a vertical element to the furniture arrangement
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