I have a couple of nooks a bit like that. I put a bookcase are in one and an antique China cabinet in another. The nooks look as though they were designed for the furniture.

There are so many things you could do to amp up that wall, I don't even know where to start!

(I would completely redo the fireplace though. that white surround is sad and needs to be replaced)

One of the first things I'd do is brighten up that wall color.

Get a rug.

a coffee table or ottoman.

How about something like this?

here's another one. simple. paint the walls white, add the natural wood mantle, shelving, and bring in an area rug w/some color. Your room has no pattern or color. not even pillows, or art!

I gave you a new light, art, the shelves, cabinet, painted the walls white, and a mantle. (do the tv over it, or some other art)

Here's another idea. paint that portion of the wall a dark color, the rest of the wall (and niche, white). bring in some natural wood shelves, and a floating cabinet, or even a little desk w/a stool to slide under.

you could do something like this in the niche:

I could honestly photoshop you 20 diff options.

You have a simple wall and nook to redo. w/some easy DIY, you could do it yourself.

whatever that fireplace mantle thing you have, I'd get rid of it.

Do some tile.

There are a million pictures of fireplace surrounds with tile, shiplap, stone, etc. First find something that you like.

I just did the shiplap because it was easy to photoshop. you'd have to do a tile or brick right around the firebox, and then shiplap on the entire wall. bring in a reclaimed beam for the mantle. do artwork or whatever above it.

For the nook, paint it white and do some white or wood shelving. add a recessed light inside.

Or, you could easily inset a bookcase. (look at Ikea or get basic cabinets and paint)

(I'm just getting small snippets to photo shop, so use your imagination)

on this one, it's a mosaic tile surround, a mantle surround, and shiplap on the entire wall. In the nice, the ship is continued, and natural wood shelving fits inside. you don't have to do the shiplap, obviously.

with this next pic, just look at what's done, not so much the colors. I know bright yellow won't work w/your room, but's it's what the picture had! you could do this just about any wall color, paint the inside niche white, and add the accessories.

You asked how to finish the space. This is how you do it. bring some life in there!

But we also need to see the entire room. I'm just working off this one wall I see

What if you did the fireplace something like this, put the tv above it, and turned your sofa so that it faces that direction? ( there is a built in bench in the niche, but ignore the window in it!)

so if you like the little bench/nook, then try something like these

Look at how cool the fireplace wall is w/some quartz on the surround, art, and the incorporated reading nook in the niche!

You don't have to get this dramatic, but it gives you an idea

You could close it up and put the TV there.

Great ideas above for improving fireplace and niche. Maybe consider placing tv above fireplace and move couches over with one couch on left and once centred facing fireplace. Add a console behind couch if you need to store items from bookcase (so you can remove it).

Move blue rug here and centre, add complimentary cushions, a coffee table and lighting.

In the “office area“ I’d remove cork board (and bookcase). Add some prints above desk (Try IKEA).

When you no longer need desk, could create a cozy dining area, if needed.

First, get the layout of the furniture in your room in the proper place. I'd suggest you move the rug and center it on the space between the windows and the fireplace. Then I'd move the sofa and loveseat to this arrangement & add a coffee table and end table BTW your room requires a larger unit for below the TV. No sense in spending a lot of money. This wall mounted shelp should do the trick.

Then decide what the niche requires.......bookcase, bar, etc.

Definitely add shelving to that recessed area where you have the bench. And put some lighting--either puck lights or LED tape lights--under the shelves to light up that dark nook.

Everything is too beige. The walls are beige, your furniture is beige. It needs life. Get a beautiful rug with lots of color, then pick up those colors for throw pillows for the sofas. Fabric or woven wood roman shades instead of blinds (?) would also warm up the space.

Agree with Beth that the fireplace surround should be redone. Then get a large vertical piece of art to go on the left side to so the fact the FP is off-center is not so noticeable.