Your space is quite roomy at almost 23 feet by 16 feet 5 inches. It would help us to see all four walls. Is this going to be an area where you will eat as well as watch TV? I would put in some recessed lighting: (I like the idea of painting the ceiling a light blue or yellow.) You need to have table lamps and or floor lamps as well. If those are light fixtures on the beam, I would remove them and repair the beam. Would you husband be open to staining the beams darker? Something like this: A fireplace mantel like the one in the Crisp photo would finish off the fireplace. With yellow and cream, you could go with warm colors, browns reds and oranges or blues and green.

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!

Thanks for the replies! My wife suggested we talk to a local real estate agent, so i think that is a good idea... just that Im not sure how helpful they are likely to be if we arent selling yet :) As for saving for our dream house, I dont disagree, however if doing this up nicely over the next ~5 years or so while we live here nets us some extra in the eventual sale, then that of course will help us as well. Interesting thing happened today actually. I got a knock on the door and one of the older neighbours asked if he could take some lemons from the tree. I of course said yes. Anyway he was telling me he had lived in the street for 40 years. I asked him if the house had always looked like this, and he said no that ~30 years ago the old old owner did a massive renovation and pulled off the timber and put up the bricks and gutted the inside of the house. Interesting stuff!

Beauty and practicality; Mmmmmm ..... When it is something that you love .... real wooden floors. Now vinyl just gets dirty , Ply looses it functionality, real wood however gains a patina. You want that. People pay thousands of dollars for that. Go with the most genuine example that you can afford of what you love. Factor in your budget and add to it, an area at a time and be pleased that your life gives character to it every day. By analogy; A mahogany french polished table will just give you a nervous break down every time someone doesn't use a coaster ... a hardwood table can be replenished over and over with hard wearing protective surface .... which you can repair. If you love it, if it adds genuine warmth and character, you won't mind maintenance. You won't be saying ...." look at this floor , isn't it amazing? It looks just like the real thing?"