I would remove the scooped headboard that accentuates the alcove. I certainly wouldn't 'hang' a mirror but opt for clean lines. Instead of a headboard I would use lateral tongue & groove up to the light switches above the bed up to the alcove & as far as the end of the bedside cabinets to give the bed a ships cabin feel. A good joiner could also add bedside cupboards to the "headboard" to continue the ships cabin feel. I would continue the lateral tongue & groove into the alcove, all over, which would be higher than the T&G above the bed but keeps it cohesive & makes a real integrated feature of the alcove. I think lateral T&G keeps it contemporary & not seaside twee. I would T&G the whole bed area in this way & keep the rest of the room pretty simple. If you wanted a mirror I would have a glazier cut a porthole mirror in the centre of the alcove surrounded by the tongue & groove. All the T&G in the whole bed area should be painted in the same colour i think so that the alcove becomes part of the whole. It will be a lovely individual feature but for success the alcove has to be integrated , i feel. A few books & a few natural pieces would look great on the bottom ledge of the alcove & would be useful too. You are so lucky to already have bed side lights & I would just change the fittings to a contemporary cabin style light on either side. There are lots around & are usually metal I think.

Any chance you have enough room outside the bath for a barn door? That would open up your floor plan greatly. I just got done installing pocket doors in my bath and office, huge space saver-but a lot of work. The barn door concept wont give you the air tight seal of a door but since ive put mine in, it is hardly ever used lol. If you can do either of those I would seriously consider moving the door closer to the tub and putting your vanity on the wall to the left. You will have a lot more storage, the layout will seem less hectic and if you are doing this for yourself (not planning on moving) you will enjoy it more. My initials used to be AD lol, now I am ADG

Just adding better pics of the alcoves. I'm leaning towards having nothing at all in the right hand one. I have a vintage bus blind which will fill the space nicely if I shorten it a bit. On the left I could build an angled cupboard, possibly at the height of the bottom of the windows, which will hide the dvd player et al and have the telly on top, with floating shelves above for bits and pieces. These will do the job of a mantelpiece. Any suggested improvements on that? BTW the sofa will be changed for something less garish when I have the money. In the meantime it is begging for a loose cover! Ive pulled it 1/3 of the way into the room, to allow a run of floor to ceiling bookshelves incorporating a small desk on the wall behind it. Still gotta design and build this! Not sure if this will work in practice, but I thought it would be more restful not to have them looming down at me from the alcoves when I'm watching TV. Plus it puts the sofa nearer the fire.

I would be inclined to go with a contrast. Either: (a) a deep inky blue; or (b) bring out the rust colour in the rug. Also, consider painting the radiator covers the same colour as the shelves. The colour you have chosen is nice but it can wash out the wall / room. Using contrast to break it up would look stunning. Alternatively, choose a deeper, stronger colour and paint it all the same.