I have just taken a couple more pictures (excuse the untidy house) from the stairs. As you can see it's an open plan area that isn't that big but very high ceilings also in wood (Macrocarpa) with dark wooden beams. The house is surrounded by bush so quite a dark house. I initially considered a darker wood similar to the beams but not sure if that will make the house appear smaller / darker...I'm really not sure what to do!?!?!? Thanks

The first thing I would do is switch your light fixture to track lighting. That way you can focus the light onto that wall much like what is done in an art gallery. I also think that may stop the reflection you are getting. I think putting cabinets on the long wall will really close in the space. I would make your red wall your gallery wall. I'd frame everything in white so they "pop" off the wall. The problem with the other wall being the gallery wall is that it's just to narrow. You can't really stand back far enough to see the art.

Depends on which room it is! If you're spending a lot of time in there, a lighter colour is best because with warmer colours, it tends to bring down the roof a bit if that makes sense - what did you end up doing?

What is the best kind of lighting for a large living/dining room with a gabled/vaulted ceiling? I am thinking of lights at the top of the walls facing up flooding the ceiling so as to reflect downwards?