Living room makeover OR make under?

Our little house was in major need of a paint makeover. When we bought it our living room was a mess of white paint, brown wall border, and oatmeal colored carpet. As a girl who loves color and could not wait to breakout the paint cans and make my mark. I painted the living room a china blue that looks like the jersey sea shore during the summer and then stenciled the living room walls with a Jan Dressler fluer de leis stencil. I wanted to have beachy elements, but not have the whole house scream "I live at the beach!". I figure Jeff and I are people who really love the beach, but also like to travel, read, and cook so why can't the house reflect all of these things.

This is what the living room looks like now.
If you squint and stare at the walls you might just be able to see the stenciling.

Right now our living room is set up like a den with a reading nook, a giant TV (Mr. R's choice), and our comfy IKEA couch and chair. I would like to pull a little "this young house" design change and convert my living room into formal living room & dining room combo. This means our living room needs to grow up a little, lose the TV, and add a little stuffyness to its bohemian indie side. Here's the plan.

Dining room details to come soon.