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.
The Half Moon wallpaper from Ferm Living has a trendy design with a black and white pattern. It fits in every room and can easiliy be matched with some colorful details. This is also a WallSmart wallpaper that makes it easy to put up.