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I absolutely love the view and this set up. The couch below the window would make a decent guest bed and I imagine there would be a bed on the left. Across from the coffee table I would want a cute, tiny, open held kitchen and maybe there would be space for a desk and some shelves near the door
what i see: tear down the wall between the living room and the stairwell. tear out the stairwell (it is nearly this steep anyway). Expand living room into stairwell and place ladder like THIS in place of stairwell. place door at Top of ladder, to close off that portion in the winter. let the light shine.