Do you have to have wall units on that wall? you could go for shelves and avoid the headache. Or maybe you could get a carpenter to box the gap:or build small fake units: Or use some slim cabinets:

I think you need to use cupboards to address the fact that the fire isn’t central on the chimney breast. Give the illusion that the chimney breast goes all the way to the window wall by putting a tall cupboard, coming slightly forward of the chimney breast. On the other side of the fireplace, maybe put some kind of slimline art, to fill that wall space. The TV could go above the fire. Possibly too put some shelves between the chimney breast and the door.

I think you need something calming as you have yellow and teal so you don’t want anything to clash. I wonder if a mid grey like Dulux Chic Shadow would go well? Here’s a couple of pics

Sorry I hadn't noticed that you'd replied with the measurements! That really helps to visualise the space. So one suggestion (which you've probably already thought of!) would be to have your U-shaped kitchen on the right as you come into the room, with the peninsula coming out on the long wall about half way along. That would zone the kitchen quite nicely. Then position the dining table towards the corner by the window. I would turn the sofa so that it's looking out to the garden rather than looking at a wall, perhaps with a single chair and coffee table so it's a conversational space, with a rug underneath to clearly zone that area (or as you have young children perhaps dispense with the coffee table as that might be where they want to play on the rug), but perhaps you want a TV there? If so, you could put the TV on the external wall to the right of the windows and position the sofa across there (again looking out towards the garden), moving the dining table and chairs to the left so there's a clear view out to the garden when you're eating. There are a lot of kitchen units in your image. Do you need that many? It could be a really lovely space but I think it would be good to be quite ruthless with your priorities, so that you don't end up with a crowded space. E.g. rationalise the number of kitchen units, go for a 4 seater dining table rather than 6-8 (you could always have a folding table and chairs stored somewhere for when you have more guests, but 95% of the time it will probably be just the 4 of you and you need space for high chairs etc), choose a neat sofa design so it's not a space hogger, etc. Unless you are going to have built in seating, make sure there's good circulation space all the way around your dining table - with little ones especially you are constantly getting up to help them, or going round cleaning up crumbs from under their chairs - and you don't want to have to squeeze past a sofa or peninsula to do that. I think it's also important to create distinct areas of the room - although it's not huge, it will function more clearly and look nicer if your eye immediately understands where the kitchen, dining and relaxing areas are (I think the layout in your image would feel a bit muddled as the kitchen takes over the whole wall and the dining table is floating in the middle). Just a few thoughts - hope that helps!