People can distinguish between a minimum of one million colors. But you have not shown me the gray or yellow you wish to use, so it's impossible for me to be sure of the colors' impact. If you wish to keep the bay as a focal point then paint all of the now green areas with whatever color you choose. Unify the bay with the chair rail by using the same color. As to patterns, this room is already busy with chair rails, windows and trim. If you have a wall that is plain in comparison consider a semi-gloss stencil over an eggshell base. The pattern is visible but muted. HERE is an example.

If you paint under the chair rail a different color, then I would do the upper portion all one color, including the area around the upper part of the windows; under the windows the same as under the chair rail.

I have to say that those windows look so much better with the draperies gone. Not sure what you plan on doing for window treatments, but if you must have them, I'd hang the rod as high up as you can. But I do think roman shades (also hung high and just barely covering the tops of the windows) would really look nice in your room.

That poor room has been the same for over 13 years.... once I took the curtains down to start this project I said the same thing.... look how bright it is in here and it looks better without the curtains. Thank you for the advice!

The four windows and chair rail make it busy enough. Keep the paint the same above and below the rail in the bay. Don't add stripes, chevrons or anything else that augments the busyness. If you want drapes do something like these mounted at ceiling level outside the bump-out/bay.

Jennifer Brouwer Design Inc. · More Info

Do you mean the bay and all the walls above and below the rail the same color?

No one has mentioned it, but I think your room would also look great all one color, with the chair rail removed.

Yes - all one color. Removing the chair rail will give you a more casual feeling if you prefer that.