Hmm, could the opening be expanded and the nook be used for a desk?

I like the expand-for-a-desk idea. Barring that, perhaps just frame it in for a door and use it as a closet? Depending on your style and your plans for the area to the left (is that the dining room, or just another section of living room?) you could surface-mount a sliding barn door. It looks like there may be just enough room for a barn door to slide to the left without covering the outlet adjacent to the heater.

My DD/SIL are in the process of remodeling their '50's home. What was once a downstairs bedroom is becoming their LR. They removed their closet door and are creating a built-in storage unit. The bottom will have drawers to store board games & video game accessories. The top will be shelving for books and display items. It will be painted to match their trim. They're in the construction stage, so no pics to show.

Maybe something along those lines would work in your case.

My first thought was adding an inset built in, too.

Congrats on a charming house! Cabinetry on the side walls: drawers or cabinets below, or cabinet with pullout shelf and a shallow drawer, and glass doors and lighted cabinets above, a little countertop. Gives you storage for anything, or a bar area, butler pantry. If you out upper cabinets in, you might have to change the light fixture so the doors don't hit it.

Love the idea of built-ins, maybe for bar area? Is the left area the living area or a dining area? Also, how big is that "closet"?

Check out IKEA Besta. I think someone here on gardenweb made a really cute and functional bar area.

Nice looking, Nosoccermom. You could maybe add a pull-out surface like a pull-out cutting board for when you need a skosh more working space, but keep it pushed in most of the time.

I think I would do a little library or office

It could be a closet, plain and simple, bbut t seems to cry out for some kind of built-ins -- bookshelves, desk, bar, games and crafts/gift wrap storage, bar (if you can run water and/or electric to it, you can put in a sink, mini-fridge or wine cooler, -- an outlet or a charging station, appliances -- lots of flexibility if you have at least one outlet in the space). How that space relates to the other rooms in your home and how you plan to use them as well as what need or want will offer you the most ue of space should lead you to an answer. If you aren't sure, finish moving in and give it some time. No rush -- and an answer six months to a year down the road may be a much better choice than what you would do now.

i would open up the door way and build some kind of builtin unit too- either for tv or books and storage, bar, display cabinet, or whatever would be the most useful use of space for you

I think that would be a fun project! Lots of great ideas in this thread. Here are some photos I found:

click on this link -- the photo wouldn't post:

http://blog.hgtv.com/design/2013/05/29/budget-beach-cottage-before-and-after-built-in-bookcase/

I would put shelves on both sides - floor to ceiling - with a few doors and use it as a bar, china cabinet, game storage and bookcase.

The hidden doors are cool -- and they reminded me of the Murphy Doors. Have the door open out and you could have a bookcase open to the room and secreet storage behind it.

All awesome ideas, thanks!

These ideas are so wonderful that I wish I had that closet you have!!! Seems like a problem that will turn into a gem. Please come back and tell us (with pictures of course) what you end up doing.

Turn it into a media room, where you can have all of your receivers, router/modem, etc., put a seamless door there and hang your TV on a wall-mounted articulating arm on the door. That way, you can pull the TV out and angle it for watching, but you also have access to the media components, and you can put the TV's wires right through the door for hookup and have no wires showing.

I love the swinging bookcase to a hidden room. It would be great to store a decorated Christmas tree in.

Wow -- if the space is large enough for a Christmas tree, that would be a great option, especially if you don't reaYou might be able to hang a wreath on the wall, stick wrapping paper in the corner -- I'd love that.

Make it into a dry bar. Wine bottle rack on top, with slats for hanging wine glasses, solid surface top like a granite remnant, which can be found cheap. Cabinet base for booze/ glasses. Or even wine refrig on half of the bottom (Avalon makes a built in dual temp one that is narrow.)