With a nice clean space like that you can go a lot of different ways. I would start by looking at shower curtains, because they can become the focal point. When you find one or two (or more) that you like, you can play off of the colors in the curtain to find the color towels, bath mat, and even wall color. Some ideas: You could go classic black and white, with a touch of something bright if you want for an accent (like the fuscia in the photo) Or something "spa-like," in acqua and cream. Or you could go bright, with teal and lime green. Another classic look: tan walls, white and/or tan towels and bathmat, simple white accessories. Good luck!

I think just removing the wallpaper and and painting (instead of adding more wallpaper) would make a big difference (particularly in the bathroom). Also, I would get rid of the current mirror in the bathroom and replace with a smaller framed type, paint the cabinet and new hardware. Honestly, I think just paint will make a world of difference in your space.

Good that the heat/air system is over the door and doesn't interfere with your decor too much. It appears the ceiling fixture to the right of the FP might indicate that the dining space is there. Put a sofa in front of the FP and two small accent chairs with it, facing each other over a round glass coffee table. Can you wall mount the TV left of the FP? I think the room is too narrow to put the TV above the FP - you'll strain your neck. If you mount it opposite the FP, a sofa and two chairs could work but will need to be small scale - try apartment-sized seating. The sofa could face the window with the chairs opposite it. You could turn to see the fire or to watch TV. Swivel chairs come in handy in such tight space.

I agree with Diane's ideas! Grey is a nice color. The only thought I had on having a corner sink cabinet, you may not be happy with it in the end. You have a little corner, and the sink may be too small for you in the end along with not having any storage space. If you can't find any curtains that you love, try a cheap roller blind for now. It will give you a visual look and an idea if you want to stay with a curtain or going a bit modern with a patterned blind or even a roman type shade. It could turn the cozy look into a clean modern look. Framed mirrors are expensive. Call a glass company in your area and have them give you a price on mirrors. It might be quite nice to take the mirror down, and replace the wall there with a complete wall mirror to fit, stopping the mirror at the vanity, and continuing the mirror across the vanity between the sink and window. It will make your bathroom feel much bigger, even though you wont be able to see in the mirror over the sink. Close up the vanity doors with new door. Use props first (white poster to cover up the doors) etc. before you buy anything! Stick on tiles are a great idea! They clean nicely and look great. Although I wouldn't go with the wood look. Your bathtub tiles are old fashioned, go with a stick on floor tile that is easy to look at, try to get samples first. Remember Gray is a sleek clean modern color. It is not a cozy country color. If you don't like the grey in the end, maybe a real pale blue or butter yellow (that would be more of the cozy cottage look).