If you've got the time and the inclination (and budgets are tight) I reckon it's worth giving the paint a go to see how it looks. Lots of the kitchens we're doing for clients now are ones with painted finishes and although (as mentioned above) this isn't the most classic style/a bit old fashioned it will look completely different painted. New handles... save up for the kitchen you really want!

You could put bedside table next to the wall on the left and install a shelf above the heater and that can be your bedside on the right side. The room will look more balanced with the bed in the middle. Or if you can position bed to face your built in wardrobe. Either way you need to address the window covering. If you can find a heavy curtain and bedspread in the same fabric and hang curtain directly under the cornice and twice as wide as your window, that will give you the height and balance the window size and by matching fabric you will have continuity and avoid miss matching colours and patterns.

Will you have a sofa in the area where the ironing board now is? If so, I'd have a rug there and one behind the island, depending on whether you or not you wear shoes or slippers inside. I always wear socks indoors (no shoes or slippers) and have a tiled floor without underfloor heating in the kitchen. So I like standing on a rug whilst cooking. Softer and warmer. But you may find you don't need that, in which case I'd keep the floor bare between fridge and island and perhaps use a rug under the dining table.

I love your furniture! The couch, chair and ottoman look so cosy. I would add some textured throws to the couch and chair, and a couple more cushions. I'd also pull them away from the walls slightly, as this will actually make the space feel larger. The wall behind the couch is crying out for some art- it really depends on your taste and budget, but you could go with a couple of really large canvases, or a photo gallery with lots of mismatched frames? Just don't hang them too high! The lamp beside the armchair would be great standing on a side table, and I'd add another side table with a lamp beside the couch where the big box is. The room would definitely feel cosier with lamps on and the overhead lights off. For storage, I'd go for built in every time! I'm biased as I love my own built in shelves so much. They definitely make a room feel cosy and finished. I'd be tempted to build floor to ceiling on the tv wall, with shelves above and cupboards below. The only issue there I think is the height of the tv...could it be lowered? It seems uncomfortably high. If it can't be moved, then long low shelving would work better than a full height unit.