If you are working with a large space and want to create different areas segment the room by using lounges and other large pieces of furniture as subtle divers.
Since the rugs in your living room may get a lot of foot traffic a wool rug would be perfect for that. They are soft reliable and durable. They are also low maintenance.
Lighting is also something to bear in mind when designing your room. The lighting can be from fluorescent bulbs or you can have enough windows to allow more light.