I love little nooks like this! Why not get in touch with your local timber merchant and source some reclaimed wood to hang as shelves, one above the other. Find some eclectic accessories to dress the shelves and add character to your room. To fill the floor space why not put a dresser for your bits and bobs, socks, ties, jumpers, etc. That might help to free up storage space in the rest of your room. Some gunmetal coloured pendant lighting dropped from the ceiling will look really stylish if possible, otherwise your current spotlight will work just as well. You can then transfer the style to the rest of your room, I think it will suit your bedding and light wood floor really nicely. http://houzz.com/photos/192218 Good luck!

I don't mind the current colours although a greys and beiges tend to suck light out of a room, a brighter colour rather than just white will help. I agree with much of what Jill says above, with a few tweaks ... the lighting needs attention. The room needs some interest, colour and texture to create depth. Get a larger rug, more colourful, with organic pattern which draws the eye outward. Big enough to sit the furniture on. Pick up some of the colours from the new rug and get some cushions. A couple of plants would help with texture and add life to the room. I know you are using the mirrors to add light and space but the one under the stairs is just reflecting the underneath of the stairs ... try a colourful print of a pathway between trees for example, to draw the eye beyond the room otherwise it's a bit bland. The TV is just on a stand that is too small and a bit low, go for a wider piece or try positioning the unit against the other wall in that same corner so it is facing the sofas, then the TV won't look so out of balance. If you make the room a bit livelier and interesting the light issue won't be such a problem. Consider pale turquoise walls for example rather than just white and add some artwork.

What we call valerian, centranthus rubra, would do well near the walls in sun, however it does get big roots eventually so I wouldn't grow it in the walls. Creeping campanulas would be nice down the walls, or creeping rosemary for a drier place, cerastium tomentosum (snow in summer), aubrieta, alyssum, various alpines.. persicarias work well in walls too, but it depends how much rain you get. These are for sun - Marina has given a good list for shade. And of course, see what everyone else is growing nearby.

As always a few photos and measurements would be helpful in order for Houzzers to be able to offer advice. You say space is very tight, is there a case for removing the bath and having a walk-in shower instead?