G.B.
Can you get bookcases that come just under the edge of the stairwell?
Use nightstands for coffee tables that have drawers -for storage.
If the living room is large, you might be able to get away with putting a sofa kitty corner (at an agle in the corner). Behind it can be large baskets for toy or blanket storage. If you dont have room for end tables , make sure you put out a coffee table and then use standing lamps flanking the sofa.
If all else fails, get rid of extra "stuff" that has no place.
ps- how handy is your hubby? I have seen beautiful walls when someone built shallow bookcasing all the way around doors, floor to ceiling and left to right - the whole wall.