Hello, I think as small as possible and as large as necessary is good. I am only briefly in a small bathroom but very much in the living room. Therefore, that would have priority for me. And I have to say that a living room with stairs is for me almost a no-go. Think again: all noises travel upstairs. You have visitors, the children can’t sleep or sit on the stairs and watch the movie. Pre-puberty can start at 10, and they move out late because of high rents...
Have you ever thought about a different staircase, one with a 1x turn or 1/4 turn? Then you could use the space in front of the stairs and possibly close it off to the living room. Also, you would have a longer wall on the left in the living room and could possibly place the sofa against it or the dining table. I would find a sofa standing in the room very uncomfortable. I would also close off one side of the kitchen more, immediately more storage space. Possibly swap the dining table and sofa area. Just a few ideas. Even if it might be seen differently here, the living room has to work or be cozy. I would make compromises elsewhere.