Dear client, here is my suggestion for your space:
Color palette: Neutral and pastel color palette is chosen on the basis of your wishes and references.
Entrance area: There is a wardrobe and storage above the door (custom made element n°1), coat rack in front and some space beside the door for umbrellas, bags etc.
Living room: You can keep your old sofa, it is placed centrally on the long wall with a framed art behind. TV is placed centrally in respect to sofa in the TV storage (custom made element n°2). On the left from the sofa there is an open custom made shelving (custom made element n°3) unit that is partly blocking entrance view. On the right is a plant, lamp and an armchair and 2 coffee tables that you can move and combine depending on where you are sitting.
Dining area: You can keep your old table and chairs or change it to suggested rectangular shape. I don’t think you have space or need for an extra peninsula with chairs in this space organization.
Kitchen: Kitchen is a custom made (custom made element n°4). I kept original position of the sink, stove and fridge. Lower elements are all unicolor including kitchen worktop and sink, so they all make a beige block. Upper hanging elements are also forming an all-white block. On the surface under upper elements and empty surface beside the window you can combine wall organizers like rails, hooks and spice racks.
Lighting and ceiling: In my opinion there is no need for lowering the ceiling in this situation, it would make the space overdone and unnatural and obviously lower the height of the space. I suggest pendant lamps above the sitting area and above the dining table. The exact position of the lamps can be reached by using decorative cords. In the kitchen area I suggest light under kitchen elements (led kitchen worktop lighting strips) and if necessary 2-3 spot lights.
Flooring: You could keep your original tile floor but it would make a much warmer and cozier feeling if you would have a wooden parquet floor and keep the tiles only in the kitchen under the elements. In the sitting area you need a nice rug of your choice.
I suggested all the non-custom made elements from the Ikea furniture selection because it is most affordable and nicely designed, but they can also be chosen from some other brand.
Furniture: There are 4 custom made elements: wardrobe, tv storage, shelvinh unit and kitchen, you can keep sofa and dining table with chairs, everything else is from Ikea, or it could be some other unique object that can fit in this simple background. I didn’t chose any door knobs on the furniture because it can be push to open system or you can choose later in detailed design. I suggested all the non-custom made elements from the Ikea furniture selection because it is most affordable and nicely designed, but they can also be chosen from some other brand.