Glad to hear your girls like fairy tale characters. The book was rather difficult with a jillion characters to keep track of but maybe someday they will tackle that also. As far as a pic of the room, it doesn't exist except in my mind. Right now it is filled to the ceiling almost with stuff moved out of our kitchen which has been demolished and any furniture now in the room such as a loveseat and coffee table,etc. will be given/donated away. I'm even not absolutely sure of the arrangement in my diagram but so far I'm tending in that direction. May have to close the wall a bit between living room and dining room because I think a little less openness there might add some coziness and also give me room to put a corner cabinet in the dining room that will kind of be hidden but still useful for storage which is what this house has least of. Obviously, I don't have this all together but I do best one step at a time so if I could make up my mind about the bookcases, I think it would help me move on to the next step of deciding the rest of the furniture/room. Even the fireplace is unfinished and covered with cement backer board ready for marble (which we haven't picked out yet) but I think the bookcases because they will be first thing one sees when they enter the room should be decided first. Thoughts? The house though small is quite nice even if I do say so myself - especially once we get the kitchen remodel finished. (Though we also have a big job ahead of us doing the hardwood floors plus other tasks by contractors - this is not diy). The house is 75 years old but as I continue on this journey of remodeling, it seems my tastes have definitely moved from vintage/eclectic to modern/eclectic. Hence the reason for my indecision. I think the builtin bookcases will definitely bring me back from my modern direction. And I've heard it mentioned here that some think builtin bookcases give a room character. We are very fortunate that our house has so much character that it is not a major concern to add more. Though guess it never hurts. (sorry I'm rambling, it is late , will stop here...)

The purpose of extension jambs is to allow the installation of casing trim. If you want drywall returns you must omit or remove the extension jambs. Photos from your phone are too small to read well but it appears you are installing casing trim on the outside so I would think you would use them inside too.. Drywall returns with casing trim at the doors looks inconsistent to me. I've seen rimless doors and widows done well in Europe but the door frames are more like window frames (narrower than the walls).

The bottom is metal-lined? Hm. It was probably meant to hold soil? That could mean there is a drainage hole somewhere. If there isn't, you can cut a 2x4 to the appropriate height to support drilling a 1.5-inch hole from above; somewhere close to one of the corners so the cables can be neatly mounted there. That is the size I drill into things where I need to put a plug through. So instead of coming from the top, the cables would be dropping through the hole in the bottom. It would be out of sight and easy to seal later if you decide to do so. Then get a bunch of cable guides that stick on because masking tape leaves an ungodly mess and the screw-on type will leave screw holes. That wardian case totally triggered my inner tinkerer. It is a beautiful thing.

Wall is not flat and the trim is not properly fastened. Get some trim head screws and fasten the trim properly to the wall.