Bed couch with draws, shared room, space saver. this could go in bedroom area. like the shelves idea, too. can add a light wooden dining table and a few comfy folding chairs to make cool dining area in bedrm space, if bed moves to living room area.
Many small living room revolve around tricking the eye into making the area appear more spacious. Such strategies can transform an area that feels cramped and claustrophobic into one that feels cozy and aesthetically pleasing.