squeakerd - it is really hard to get a perspective on the whole area but if this is part of a much larger area then I feel you need to first decide just what you want as the end result. Do you just want your entire area to be one open plan or do you want to break it down into visually defined areas within the open plan. As you have the area now, I don't feel any cohesiveness between your table and the sideboard, I think I would move the sideboard to the end wall, it looks more like it would belong there, even just by the shape of the room. Definitely a larger rug will define the space better - just be careful of any trip hazard with the door nearby - but before you decide on the rug, consider window dressings and whether you want things plain or introduce some bold patterns and what colours look best in the area. Artwork can go where your sideboard is now, but again think colours and impact of design on the whole area. It is all very well to build a room around one piece, but you need to look at the impact that piece will have on other items and what limitations it could cause. I would suggest you set aside some serious time to look through photos on Houzz, especially if you can find areas similar to yours, till you find what appeals to you, put the photos into your ideas book and use that to build your room. I have found this invaluable in the past and it has saved me many an expensive mistake.

A nice whitewash wall/paint treatment would brighten it up if done in a light color. Or I would paint it but not sure if all the knots will bleed through? If so then I would use an oil base Kilz to stop bleed through and paint it depending on the interior design I want for each room. I would not paint the ceiling for a more Montana look,

Removing the kitchen servery and making it a walkthrough to the kitchen, totally changes the flow and functionality of the two spaces. Keeping the exposed beam ceiling was a great decision and looks great!

Why don't you live in the house for a while and get a feel for things. The curtains are bright but if they are still good quality / newish it would be a very expensive exercise to replace them (I have just spent a few thousand just on three rooms), you can always add a few red cushions or a red toned throw over your existing couch or a rug with a red tones in to it, to tone the red down, if required. Repainting the walls is cheaper than replacing curtains and a piece of art with red tones may also help. As far as furniture is concerned it would depend on what you like style wise. Why not send us a photo after you have moved in. You may find some of your concerns disappear once you are in and settled.