Please help our livingroom!

Problem One:
When we moved into our home, our living room is currently a dark grey/brown/lets mix everything we have left from the rest of the house together so we have enough to paint this, color

Is is dark and dingy. It spans three walls of our living space, and into the "sitting room" which we use for our piano and china hutch.

Problem Two:
Carpet + Puppies. Need I say more? They do not have accidents any more, however they roll in the dirt outside and then come in and roll on the once nearly white carpet. It now looks like crap. We purchased a large rug, however now the rug, and around the rug looks ish. When we pick up the rug to look under it, one can definitely tell there is a "dirt line".

Question One:
What color(s) should we repaint? I want something light and airy without being too much.

Question Two:
Take up the carpet? Or not? There are wood floors under, however the corner of the carpet I peaked under, it appears whomever tacked down the carpet used plenty of staples. I don't want to rip up the carpet on to expose a mess of a wood floor.

Visuals:







I do like the idea of a beachy theme.


I recently picked up 2 of these clearance side tables.


I have had this for a while, LOVE it, however haven't found the perfect spot. Will our livingroom fit?


Please... anything. I am uninspired. We are on a very low budget... like really, at this point we can only, maybe, afford the paint, and time to rip up the carpet, so nothing fancy!

THANK YOU!