I have no idea why builders do what they do. What purpose does the niche fill? It collects dust, adds nothing to the design of the room. I would have it dry walled then frame the doorway with the same white trim as the others. Also suggest you paint the ceiling one color.

The problem in this room is that it is all neutral. An all neutral room is very difficult to achieve well, since there's not much contrast, and if the neutrals are from different color families, they clash. I would suggest using more saturated colors in something--rug, pillows, wall color, accessories--to focus the eye away from the clashing neutrals. You can also add organic items like green plants to liven up the space. Or add some architectural interest like paneling or beams. Here are some neutral rooms done beautifully: Before I went to design school I learned to study a room that I liked and figure out just why I liked it. What elements in the room appealed to me? Why? How were they arranged? What colors and patterns were evident? How could I achieve that look? You needn't spend an inordinate amount of money, you just have to select and spend wisely. Use a sample board--get small samples of materials before you purchase and see how everything looks together. Put the samples in the room with the lighting and squint to get the feel (I am not kidding about squinting!) So instead of ordering an 8 x 10 rug, get the 2 x 3 sample first and see if it works with what you have. If it does, great. If not, either try another rug or change what you have. Or go to the rug store with all your samples. Never go shopping without all your samples in hand. Putting together a room that you love to be in is not easy--it takes time, money, and talent. That's why people hire decorators and designers ;)

Can you post more pics of your space? and what inspiration looks do you like? google modern farmhouse and see what look you're leaning to.

We have a lot of modern living room furniture like this if you’re interested Cooldecor.xyz