I am SO an armchair decorator, but first of all-you need to always prime walls (after a good cleaning), let it cure for a day or so, then paint. Any plastic moldings on the edges of your walls? Use Rustoleum paint-it is much harder when it dries & won't chip like regular paint. My favorite prime is from Home Depot-its called 'Gripper'. Awesome stuff! I have even primed my mobile home's formica furniture with it, then a semi gloss paint-looks like real wood! As my home has more of a 'cottage feel', I had no problems with the paneling's cracks showing. One idea for your headwall is to consider using material! YEP. If you use thin cotton material, you simply cut it as you would wallpaper, place each strip in a pail (about 1/3 full) of Niagara liquid starch! Saturate it well, lightly wring out the excess by pulling it thru your fingers-NOT actually wringing it. Place on your wall, secure at the top w/push pins while you finish smoothing out each piece-working from the center out to the edges. Let dry overnight, then remove push pins. You could make/buy a bedruffle or valences to go w/the cloth wallpaper. Nice thing is-it's inexpensive, can be removed, lightly washed, re-starched & put up again, if you ever need to. OR...how about the white 4x8 sheets of wainscott for the bottom half of your wall & then paper the top half? In my master bath-I painted my walls above the counters in a deep mauve then added the vinyl lattice over it-looks really cool & opens up all kinds of ways to hang decor items behind your bed. The other wallboard you're speaking of is really just a paper covered masonite board. Again-the primer I mentioned, is a bit thick-a couple of xtra coats of that, in the torn areas before you paint, may hide that portion. My smaller bath was lt beige w/taupe vines on it. I primed it & painted it in a sage green w/cream woodwork.

Fifteen inch-deep shelves should be plenty big enough for children's books & a few toys, but in your inspiration picture, the seat & the shelves are the same width, and while fifteen inches is a deep enough seat for a pre-schooler, when your grandkids grow up, that seat will be way too shallow for them to get comfortable, which is the whole point of a window seat. So that depth should be extended. Also, make sure the wooden seat height is far enough below the bottom of the winndow to allow adequate clearance room for a truly comfortable cushion, not one of those thin foam pads. Also, with tha extra depth of seat, you'll probably want to make the shelves's framework deeper to match, so that there's room for a matching cushion or two to lean up against the outside of the shelves. And since that means you'll have extra shelf depth to work with, you might think about bringing the wiring up into the framing of the shelves, so that you can add a pair of sconce up above head height for someone --that is, you--sitting there to read to a young one. You need to be comfortable, too, because regardless of what they say, it's NOT all about the children. Which brings us to the whole matter of blinds-vs-curtains. On normal windows, blinds are fine, but for coziness & the kind of secure, protected nook that kids crave--think back to your own card-table-&-blankets tents, here--nothing beats an enclosed window seat with curtains (not blinds) on the room side (not the window side) of the seat, drawn tight against the larger room, as anyone who's ever read the memorable first chapter of Jane Eyre will attest. Aren't you glad you threw this question out there? It just keeps getting bigger & bigger.

In terms of the pony wall at the front door. People do take them out a lot, but it defines the entry and creates a place to put a piece of furniture much closer to the door than you would if the wall was not there. This definition of boundaries can be important, especially in a small house. I would select a rug first because that will give you some color direction. You may find only a handful of rugs you both like and can afford, and paint colors number in the thousands.

In my opinion you should cover all the window trim and just have the glass showing. You are trying to create an illusion that the windows go all the way to the corner and showing the window trim destroys that illusion. Definitely a pinch pleat is the most elegant , and the closer together the pleats the better. But then it depends on the rod you have or are thinking of getting. Whether or not you have a valance box and if you have an existing sheer already. I think you have to go looking or consult someone who makes custom drapes. Without actually seeing things or knowing the look you are after, I can only give you general advice.