Hi Natalie. I think with spaces like this where you need to maximise storage and not block the walkway I would have custom made shelves under the stairs - some of these can be open for books and DVDs and others as cupboards. I would then fit the TV on a bracket on the wall where the dolls house currently is. A small sideboard could be added under here or where the 'play kitchen' is although this would limit the size of the L-shaped sofa. I think painting the woodwork white is a great idea and I would also suggest swapping the floor length curtains for a Roman blind to increase the sense of space.

Some cube units at the rear could work for shoes. Baskets for each person maybe? The coat rail might do better a little higher. I see there is a rack for the iron board, use it to keep that item clear of the floor. Use of the walls to hang but would not look to shelving as this would only make it harder to get to the rear.

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The simplest solution is to put doors on the area. I would put the dog crate elsewhere as that is making it difficult to find solutions. Do you need a dog crate - is it a puppy? Stuff that can be seen never looks tidy. Is there someone in your household who can use a saw and attach some hinges? You could make MDF or wooden flat fronted doors which can be painted white. Even getting a carpenter to make the doors shouldn’t cost a fortune, but obviously a bit more than a shoestring. The curtain could work short term but I’m not sure about the lights. You don’t really want to draw the eye there. Here’s a couple of flat fronted door ideas, one painted and the other natural.