trying to make this room "cozy" what decor should I put above the fireplace / built-ins . Also should I hang drapes if so what color goes with tan walls?
Can't tell but can the sofa or love seat be moved out from the wall? If you want to leave the TV over the fireplace, I'd remove the trim. I don't see a comfortable sitting place, one reason I suggested moving the furniture to make them "social". After positioning the seating, you might want a large coffee table or ottoman to bring it together. On the shelving, I'd leave only large (viewable from a distance) pieces. Simple drapes might add some interest and color, also adding pillows on the seating adds color. I might get a more vibrant area rug. then coordinate pillows and drapes.
C Marlin