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.
This space turned a room divider into art with a gallery wall. By filling the entire wall, the floating wall becomes both the backdrop and the focal point for the living room. Photo by The Apartment via Style Me Pretty Garden Decor