I'm admittedly a book nut, but how about cookbooks, if you don't have them displayed somewhere else? You'd need close to a foot in depth; can't tell if you have that. Looks like it's close enough to your kitchen it wouldn't be too inconvenient.
Or other books? Something that looks nice related to your husband's office, maybe?

A vote for smooth walls -- and wall photo/artwork display area!

I'd sheetrock it.

susanka - we're book nuts too! We have over 10,000 of them and hubbys cookbook collection numbers in the hundreds. :) Plus the shelves are odd shaped to put more than a couple on each. I can't gain any room from elsewhere.

teacats and natal, that's what I'm thinking too. Sheetrock. Thanks!

I'm all for using any space one can find to use for storage, but that wouldn't stop me from using this area for displaying family photos too. Actually you can have both!
Since this is right outside a bathroom I vote to add shelves to store toiletries, extra TP and even paper towels since the kitchen is close by. Great place for a first aid kit too. So many small items from the kitchen or bath could be stored on shelves I just can't see closing it off with wallboard.
In order to display family photos, I'd have the handyman remove the knob, pretty as it is, and replace it with a magnetic latch that will pop open with a push of the finger. I'd buy desktop frames in a size that would fit nicely with the door leaving a bit of the door showing all the way around. Attach them with the open end up so you could slide the photos in from the top with out having to remove the frame from the door.

justgotabme - oh my, that's brilliant! I'm glad I caught this before having him come back inside to do it. I hate the door itself so covering it with pictures would help a lot.

Thank you!

I'd sheetrock it. It's an odd spot to have such visual interest as a door full of photos.

Hmmm... I don't know what "sheetrock" is... but I presume it's what would make that area look just like a regular wall, as if the closet was never there?

As much as I hate to lose any INCH of storage space ANYWHERE, I am thinking I would probably close it off and cover it over. A nice, smooth wall there would be lovely... and if you aren't using it for storage now, you won't miss it!

(I just don't love the shelves idea... too "busy", IMHO.)

I'm glad you liked my idea Susan. I happen to love quirky little things like this in a home. Gives them character.
Builders rarely include things like this in homes anymore. I think that's why I love Victorian and older homes so much. I do understand the love for clean lines too since I adore mid century homes too. It's whatever works for those that live in the home that's important. Just as personal as fashion. It's what feels good.

justgotabme - I love hearing all sorts of ideas for my spaces because when you see them all the time, you just sorta glaze over it. I'm all over the place on this funky wall. Now that I have these juicy ideas I'm going to ponder them for a while.

I love older houses too. This one is just a 50 year old tract house that was extensively remodeled downstairs to make a beautiful open layout. But the upstairs is a total disaster. Ugh.

And nothing was done to code so we are spending so much time and money getting people to bring things up to speed. I'd rather spend the money on making it pretty.

I love hearing everyones ideas too Susan. My Mom always said if we were all like life would be pretty boring, but then she also understood that when others copies your idea it was something to be flattered about. So I guess what she was saying was to be positive. I can't disagree with that.
I do agree that some quirks aren't good and it's more important to follow code. There's a reason good reason behind them. Blows me away that some places still don't have building codes. Makes if very dangerous for not only the family living there, but in case of a fire a home can be less stable for the firemen.
Okay that was a bit off subject.....sorry. :^\