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.
Perfection- going to do 4 built-in desks at some point, for a complete "homework room". This color scheme (white desk, that blue wall color) is great, and love the star light fixture. Makes homework not SO serious.