This old house was sadly lacking in sufficient closet space (one closet per bedroom, but no coat closets). Additionally, there were two doorways from the back wall of the living room — one leading to the dining room/kitchen, and the other through the short hallway to the other bedrooms and large bathroom — which together made arranging the living room in a rational way impossible.
After deciding the second doorway was more of a problem than a solution, we filled it back up with ship lap to match the original house walls, and added sheet rock to match the current level of finish on the walls. As we discovered during this process, the doorway to the hall was not original to the house, but had been cut into the wall at some point in the past.
This solved the problem of furniture arrangement in the living room, plus added a large hallway closet on the hallway side.