While your grand 2 story windows are pretty, you do realize that there will be practical problems? I don't want to beat a dead horse about heating that room... ok well I will. Obviously the r-3 wall (what it will be with windows and the pack of studs in between, is going to be a huge heat loss. Combined with the heat rising, it will be a room that will take the majority of your heating needs. And it isn't just an energy use problem, but it becomes an issue with vastly different loads between this room and the rest of the house. Second, I know that Washington is not sunny NC, but it surely gets sunny at times. A SW facing wall of windows that you can't cover is going to be frustrating from the glare. I have a view wall facing SE and we need sunglasses inside at times but we can close the blinds. It isn't 2 stories either - just 10 ft ceilings with 14 ft wide window bank. Third, again while it isn't as sunny there, when it does get hot and is sunny, you will have a cooling problem. And mind you, it isn't just the energy use, it is the differential in the rooms. You may be turning the stat on 75 but have some rooms at 70 and freezing just to keep that room comfortable. It is very difficult to design a HVAC that can handle such different gains in different rooms. I have a study with a wall of west windows and have planted a tree to deal with the 4-6pm heat up. I rent mountain houses fairly often in the Asheville area and this type of wall is common. But it can be frustrating even just for a few day stay. The last one had tinted the windows and installed an electric awning outside. Blinds and drapes just don't fit well with these walls in the mountains. Honestly - they could be installed but no one wants to because it doesn't fit the "mountain" style. In that house, we had to sleep in double beds downstairs because the king upstairs was too hot from all the gain in the afternoon - and yes the house had a/c. Obviously not the best designed system and you will do better but the challenges are there. I have an oceanfront house (vacation rental) - I understand the need for view without compromise. But the 2 story huge windows you don't really see anything out of except sky and for a large portion of the time you are there, you might be staring at the sun. Yes - they look dramatic. But drama's appeal wears out and practicality does not.

The natural jute or seagrass rugs will not look as good on carpet and may permanently discolor the carpet. Plus, it is just another edge for kids to trip on, so I personally would not layer flooring in that room just for looks. Reluctantly agree with above poster who speculated that bar table, while cute, would end up as a horizontal surface only (read: repository for anything you need to put down) and not as an eating area. I would maybe get a bigger ottoman than the chair (if you replace the chaise) would need, and get a nice big melamine tray with sides and a handle for the top for their food. (If you decide you want to try a table I wouldn't try a round one if it is going up against a wall for obvious space considerations, and I would get a regular height one, not the pub height...... think kids horsing around and falling off those high stools, their center of gravity is pretty high.) I bought a bolt of green and white mattress ticking fabric online years ago and had slipcovers made for two sofas. The slips outlasted the sofas! The navy and white (more in real life like navy and off white) is very durable if the fabric is cotton twill and woven, not simply printed on the surface. If you google signal flag pillows (images) you'll see an embarrassment of riches. If you go the signal pillow route you can always just do solid color pennants on the rafters. There are etsy shops that will make them to order in the colors you desire or you might find them already made. I have to say though that I really like the flags on rafters picture posted above!

You could build shelves in a stairwell https://www.pinterest.com/pin/528891549974717015/ around each window and door frame and around the top of the wall of each room above window height next to the ceiling. http://topotushka.com/marvelous-interior-and-exterior-designs-on-ceiling-bookshelf/ceiling-bookshelf-unique-on-interior-and-exterior-designs-intended-for-bookcases-ceilings-reading-nooks-spaces-8/ https://www.pinterest.com/pin/329396160216860642/ https://www.pinterest.com/pin/276619602084864857/

You have a good start... you just need accessories. Think about some plants, leather, some metals (side table, etc) and definitely some Kilim pillows. You appear to prefer a neutral palette, but that doesn't mean it needs to be boring and flat. The art is fabulous but feels too contemporary for this space. I would consider bringing in a darker basket to put kids toys in. Remove one of the white chairs (maybe use in a another room) and bring the other up onto the rug. OR sell them both and buy one nice leather chair with arms for the spot in the corner. Use a large floor plant for the space near the window. Ikea has large plants quite reasonably priced. This is just a few examples off Pinterest. Take pictures of your elements and put them together on the computer (I used Word and remove picture backgrounds) to create your own sense of what goes together and not. The first one probably has more traditional elements but looks at the shapes, colors, textures... I think you should get some accessories first and your rug should be fine.