Hi Makeithome. I'm not in love with that blue, but it's not my house, so that doesn't matter. What matters is not the specific color, but how it's handled. The existing scheme, with a different color on the stairway wall, looks really off, like the room was never completed. If the stairs were in a room of their own, having a different color in that area would make sense, but this just looks like the painter didn't come back after lunch. So yes, paint the stairway's walls--both sides--the same color as your living room. And don't worry about painting the upper hallway the same color. Use whatever makes sense up there, and let the blue begin on the two separate sides of the stairs. Easy. But here's a caution: the paneling on your inspiration photo looks awkward, and here's why: the dado rail (and the panels below it) is too high. These days, in new houses, building codes mandate higher stair rails than they used to, which messes up traditional proportions. But safety (or "safety") concerns trump aesthetics, so we just have to deal with it & do the best we can. At any rate, dados now need to be higher in stair areas than they used to be, in order to match the rail on the other side & keep the visual balance. But in your inspiration photo, it's even higher than that, and as a result, the panels look clumsy & amateurish. They're too big, there's not enough height between them & the baseboard and there's too much horizontal space between any two adjacent panels. The overall design of this wall makes me think maybe the layout was done by the carpenter, not the architect, and while a few carpenters are up to that sort of thing, many are not. For someone with a better sense of proprortion, coming up with a better design would have only taken twenty minutes, while others could work on it all day and never figure it out. Anyway, all the problems stem from the height of the dado itself. The height of the dado on the stair wall (not the perpendicular landing wall) should either have been lowered at the point where the two landing walls meet, or there should have been a step-down from the current height of the landing's dado down to a lower angled molding at the first step, in the same way that the actual stair rail drops down a foot or so at the same point. That would given the stair wall's panels much better proportions. The good news is that since your stairs have a straight run without a change in direction & you won't be doing any structural work that might triggers the new codes' railing-height, you won't have to deal with that problem. Just make the dado top out at the height of your existing railing. Then add the panels. BTW, if you're going to add a chair rail to your living room, I'd carry it all the way around the room. That way, it will look like it's always been there, rather than something somebody decided to add, then changed their mind.

@decoenthusiaste - I rearranged to where the sofa is on the longest wall and the TV is on the wall opposite of the window. I like that setup the most, but I need more seating in front of the window like 2 wingback chairs or something similar.

:) Valid questions The office room will be used as a bed room. So, I dont have a "real" office room. I do work from home a lot and that dining room would be really multitasking. kitchenette is wife's demand. So, no questions asked there :) In fact, she does lot of cooking and often cooks with spices that make the home smell like a curry. kitchenette is to avoid that. With a nice vent system, that kitchenette would help us contain the smell. We are not really thinking about the house for sale down the road in the near future. We wan to build one as we want it and live next 30-40 years happily ever after.

Art is so very personal, IMHO. I like the older Monet styles of art, but something bright and bold would bring an infusion of color. Do you like contemporary? Do you like abstract? Do you like impressionism? Is there someone local that speaks to you? Do you want people in your art? Try a poster from art.com because it can be cheaper and may help you. We have a Hyunah Kim and a Vassileva in our hall bathroom!! I have impressionists in our living and dining room and a TC Steele in our dining room. I also have some original art in the LR/DR. The others are posters. So, what I am saying is, art is very personal. You need to find some that speaks to you!!!