There's a common philosophy behind most appealing and practical domestic interiors. Fundamental to that philosophy is an organizing principle: The home is to be divided into three main areas.
The first includes the private areas of the house, principally the bedrooms. The second is where work of the house gets done, including the kitchen and, in some cases, a utility room and a secondary entry area, where boots and raincoats are removed and stowed. Area three is for relaxation, and may include a living room, dining room, and a family room. In some houses there may be subdivisions within these three major divisions, as in instances when the relaxation areas consist of both public spaces where the family entertains visitors (such as a formal living room and dining room) and private relaxation areas that are generally reserved for family use, such as a teenage party space or a study.
In a well-laid out house, these areas are separated physically as well as philosophically. Bedrooms are often best located at the opposite extreme of the house from the entertainment areas in order that sleepers won't routinely be disturbed by the laughter and energy of the night owls in the house. Work areas may also be discrete from public spaces so that guests don't have to see piles of laundry on their way to the dinner table. In smaller houses, the sleeping, working, and relaxation areas of the home are more likely to overlap.
Consider your home in this context: Does its layout separate the life of the house into areas? As you contemplate changes you would like to make, will they respect this division of work, play, and sleeping areas? Do you have special criteria that should influence your thinking, such as a teen's enthusiasm for head-banging rock or a dad's love for string quartets?