If you have no fireplace/mantle, what else can be the focal point in a tiny living room? Do I even NEED one?

Add a coffee table in front of the sofa and use it to display interesting items, a vase of fresh flowers, etc. A gl coffee table will keep the space "open". Create visual impact by xeroxing favorite photos in black and white. Frame and hang for your own personal gallery. D a beautiful blanket over the couch and add coordinating throw pillows as accents. All of these require no long-term commitment, are easy to change and update, and all will create an interesting focal point. If you are feeling brave, try painting one wall in a bold or deep color. Accent walls are very current and dramatically change the look and feel of a room. I highly recommend the book "Home Rules" by Nate Berkus (and no, I have absolutely no affiliation with Nate or the publisher!) The book has tons of simple yet impactful ideas for every room in your house. There is even a chapter called "Small Spaces" which I bet would help inspire you!