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.
towel rods on the back of the door- great idea for a space saver. Just need to make sure there's a door stop so they don't hit the wall :) was thinking of wallpaper on the back of the door behind the towel rack