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.
good example of mixing the white couches with the gray coffee tables, the grayish color walls and then the black with brown top coffee table. Makeover Round Up: Our House Six Months Later. Before and Afters from Honeycomb Creative Co.