How would you make this outdated 1970's basement layout more modern and livable?

It works. What exactly are you looking to do differently?

There’s not loads of space - but here are a few things I’d do

1. Reconfigure bath to add a toilet and enlarge shower

2. Add 2ft to the bedroom by coming into the Rec room

3. Remove "hall" wall to open up the rec room

4. Create kitchenette in the storage area and open wall

We would need to know what you’re looking for. You could potentially take some of the storage room for a home gym, small theater room, or office. It doesn’t seem like there’s much to do here.

Which walls are load bearing? And what is that appliance in the storage room, across from the laundry? Also, are you willing to do any plumbing/electrical work?

Dream basement

It looks great to me as-is. What do you find unlivable about it?

Only thing you can do is box the furnace off with the laundry room, gives you another space in the south west corner. Then the laundry furnace room will need drywall and screening to hide the furnace, and laundry room gets updated everything else stays the same. If that's not your cut of tea, then you need to move the furnace into the corner to open up the entire space to do want you want, otherwise it's already maximized.

Knowing the walls that are load bearing is essential to make meaningful suggestions. Removing all or part of the center hallway would be an obvious first step toward modernizing, but not if it's holding up the floor above.

It would be helpful to know more about your objectives. There's a large storage space. Do you need it? Would you rather have a home theater or exercise room in its place? Or maybe a kitchenette?

And an idea of your budget would be helpful as well. I imagine this is a slab floor. Do you have the budget to move plumbing around?

I would move the laundry to the storage area. Having to walk way to the back with a load of laundry is a pain.