Very pretty! What about side tables at each end of the sofa with some large table lamps?

Is there a reason only one window has treatments? I think adding more fabric to the space will help warm it up.

Cute baby head!

A more substantial end table with a lamp on it will help. I would get more side tables too...one for each side of the sofa and loveseat with lamps as well. I would put art on the wall, and I would put a fake tree (a nice one...I know there are others who will cringe at the thought) in the corner with an uplight on it. Or you can put a corner shelf unit in the corner...it would be used more for display than for actually storing and retrieving stuff.

I would hang artwork and add a floor lamp that you like. Not sure a bookcase would look good back there. An area rug will do wonders, and I know how hard it is to find one you truly love. Been there, done that. But sometimes a cheap one to fill the void will do wonders. Big box stores have low priced ones in decent shape. On the plus side, you won't worry if your kids spill something. A cutie by the way.

Are you planning on hanging a matching drape for the other window?

I agree it needs something there, and I like the idea of art instead of a bookcase.

Maybe you could put the baby head to work? If you bought an inexpensive canvas & a selection of paint colors that you like with the scheme you have planned (plus a couple contrasting ones) - is the baby old enough to produce some abstract art? Even as a temporary solution, it might give that corner a sense of purpose.

What strikes me is that you have a lot of solid colors. Solid white, beige, and gray. A patterned rug would help (but I know it takes time to find one you really like). I think that's why it feels like you need art in that corner more than a bookcase. An alternative would be a collection of small plants (air plants?) in small pots in the light blue you like. Put them on shelves (since you have room for shelves mounted to the wall) and maybe add a few keepsakes as well.

I think you are doing well. I like the gray and cream combot of the drapes and sofa. As others have said, the priorities seem pretty clear:

Matching drapes for second window;
End tables;
Table lamps and a floor lamp;
Art on the walls.

Other than getting larger size art pieces, don't agonize over it. Just pick something. With the neutral colors you have, you can go in any direction. Get one piece on the wall and get inspired. I see you are in Canada. Do you have an Ikea nearby? Take a look at their artwork.

I like the room it is lovely it just needs those finishing touches that Anele and annie and the others have mentioned! You have a great start. With texture, pillows lamps and art it will shine!

Run, don't walk, and find an area rug in the colors you like. I know you love the wood(me too!!),but with the large expanse of floor, it wouldn't hurt to cover up a little and at the same make the more visually appealing.

Get a few pillows in the same colors as the rug, but not too many! It's ok to keep the room all in neutral colors, gray, ivory, tan~it's soothing and relaxing.

Here is a link that might be useful: only an idea for colors

Cute room and cute baby head!~
You need some fun decorative pillows....the sky is the limit!

It's a pretty room! I also agree that a rug and some throw pillows with pattern would really help.

Can we see more pictures? I'm thinking the furniture might need to be rearranged. Maybe the TV in the corner between the windows and the rocking chair angled next to the window with drapes. Near where the outlet is. Sofa facing draped window and love set facing undraped window.

Wow, thanks for the replies. I'll pop in with more details and photos later, but I thought I would note that the living room is completely open to the dining room which also has a large window with dark gray drapes. The dining room also has a smaller window directly across from the small window in the living room that is currently naked as well. We weren't sure what to do with those smaller windows in terms of window treatments, but we did feel like it would be too "heavy" if we had 4 windows in close proximity with one another that all had the same dark gray, floor to ceiling drapes. We were thinking about doing blinds or roman shades, but weren't sure if we should go for the same light gray, or something lighter.

Pretty room, nice start! I'd like to see the drapes you currently have in the dining room on the bare window here. Mount them the same width as the current set, that will help your bare wall and make the whole room seem cozier. Maybe then do roman shades on the dining room windows. It's okay for them to have a different type of treatment even though the rooms are open to each other. Go with a gray if possible though.
Home Depot has a nice selection of area rugs at reasonable prices. My DD got a nice 8x10 Mohawk Home, Medici Mushroom/Pearl. It's a muted small geometric pattern, but really softened up her dark floors, and couldn't be beat for her limited budget. They delivered it free. Her colors are very similar to yours, and she's brightened things up with some red print pillows and some soft green accents.