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.
Inspiration: Moroccan interior Design (From Moon to Moon) Moroccan interior design inspiration. Loving everything about this photo! The colors, couch, the plants, the tribal masks and the butterfly wall frame.