How you choose to furnish your home is decided as much by your personal choice and style, as it is by the limitations and dimensions of the space that you have. In a large loft-like space where it is mostly open plan, the arrangement of furniture will be different to that of a more traditional flat.
In a loft space if you were to put all the furniture against the wall, the space would look barren and cold. Rather you would place the furniture in and around the room, creating smaller spaces as you go: a cluster of couches and arm chairs to construct a lounge space for example, with a lovely thick rug to keep the feet warm. In a smaller space, however, fitted furniture, that is furniture that is fitted to the walls of the space, can be a real life and space saver. Most apartments and houses these days don't have that much space, you are very lucky if you can find a house or apartment that has very large rooms.
But there is nothing wrong with smaller rooms. It is just a question of how you use the space.
In a smaller bedroom for example you wouldn't put the bed in the middle of the room because it would take up the whole space. Instead you would have it fitted to one wall.