This is a nice-looking living room with smaller rug. Perhaps the key is to frame the rug with sofas / sofa and armchair combo / sofa and the window. And another trick is to fill up the room so the size doesn't look awkward.
Love this for the livingroom makeover later! do green pillows instead of yellow. Gray + Yellow + Gold, nice collection on the wall with lettering. Don't like too many scatter cushions on my couch though.