You have a great opportunity here. I do not recommend placing a tv over a fireplace. Yes, we see it often, but it is not practical for two reasons: 1, the tv has to be placed too high and 2, it is hard on the eyes to be looking at the fireplace light and the tv What I would do is to remove the plaster and re-expose the brick. You could paint it an interesting color or resurface it. Then, I would add a unique mantle.If you have the funds, ideally the threshold should be removed (more contemporary) or resurfaced (more traditional style) The wood store could be a book shelf or display shelf. In the right corner, I would place a comfortable reading chair. The TV I would place on a different wall. Without seeing the entire room, I am not sure where.

I would use a bookcase unit with closed doors on the lower half and not too high. Wide and low maybe. Closed lower cabinets are great for toys, games and will not clutter. Open shelves tend to get cluttered after a while. When displaying books, use in stacks standing and lying down. Open space between groupings, not all lined up in rows. Add some decor items sprinkled among the books to give the eye a visual break. I would choose a horizontal art piece for the chair wall. Add some art on the long TV wall leaving a lot of bare wall between the TV . and the artwork between the corners of the chair wall and the window wall.

I am planning to add scatter cushions and think if I do a pair of larger ones for each end so they go over the arms to creat height at each end, and a couple of smaller ones, I want to bring some colour in too. I do like the idea of a larger side light at either end to, Switching the sofas is going to be my final fix if all else fails!!

Well, for lack of a better idea, since you find it a drafty little space. I'm assuming the draft comes in on the right? Most of the necessities in the area are located of the left side; i.e. vent, thermostat, light switch etc. What I would do I think is caulk up the drafty spots, maybe even add sized poster board wrapped in batting I covered in a gorgeous fuscia with diagonal grosgrain ribbons every which way covered with a heavy velvet to be attached to the area above & below the window. (Of course remove the drapes that are hanging in there). This for the purpose of using it as a pin-it board for notes. Attach a table height board covered in felt to carry across the full width of the little room. Leaving just enough space for a comfortable little antique desk chair. Paint the back wall a bright cobalt blue, paint the ceiling a silvery pearlescent white. Find a way to attach a clip-on task lamp. And stretch a heavy duty enough wire across the top of the opening and complete it with a heavy doubled velvet drape with a drooping valance. Place a swag with fringe & jewels on it to be closed when not in use. Voila intrigue is yours!