I wouldn't drywall over the window. Take a look at the options for recycled brick, they may match better than you think.

We installed LEDs in all of our new construction recessed lighting. Love this bulb -- looks like a warm standard can light. Perfect soft white -- not the super bright white. Uses 13 watts. Bought them at Costco.

Try wood and glass. Consider hanging the mirror vertically and about 5" from the sideboard top. You could also move the table under the light fixture, change it out for a chandelier, and put the sideboard and mirror on the clock wall where the mirror could double the chandy which should hang 36" or less above the table top.

I think it depends on the style and atmosphere you want to create in the room. If the room is a formal, traditional one like your picture, then one large showy pendant would look great. However if it is a modern or contemporary room then two ( or more) smaller pendants would be a nice feature. It would also pay to think about how much light you are expecting from the fitting, especially since it is a cathedral ceiling. Do you need the ceiling lights for good general lighting or just for atmosphere. Do you have any photos of your room so we can see a bit more?