On the downside this room will always be the main thoroughfare, and the upside is that it has the opportunity to introduce and ipress people entering your home. Being a room they enter as opposed to a boxy hallway, it gives people the feeling of lint and space, I would add to that some comfort, in the form of luxury. Being a room that is walked through and not 'to', I would utilize it as an escape, somewhere to head when you want to have time away from living zones, often shared and loud. Treat this as a retreat. Your beUtifuk box bay window seat inspires me to suggest a library. You can build or buy a beautiful floor to ceiling bookshelf that I would position adjoining the entrance to create a partition or corridor, so it blocks the room initially and slowly reveals it's cosyness. The bookcas could be double sided so it allows light to flow through and display items in peek a boo fashion. Remove the soa in the front walkway as it is a visual blocker, and place it under the window. Normally I wouldn't do that, but in your case, a rug in front and under that sofa, the ottoman in front of the window seat, and a tray table in front of the sofa. The new 'hallway' would direct people through the home to those living zones, quickly and neatly. Make that wall a gallery wall, with your collection of images or family in a beautiful eclectic collection of frames. Leave some empty or frame objects you love as much S photos. Books, cushions, throws and fabric exude comfort and luxury if chosen to do so. A beautiful side table and lamp next to the sofa ( i spy a power point) so the room will feel warm with a throw over the arm, a book in hand and somewhere to place your coffee. A beautiful space, make use of it as your own sanctuary.

I'm what I consider a reasonable landlady and unless the paintwork is shabby, I don't allow the tenants to paint the walls, as every tenant wants something different and they are not professional painters, so it can be messy, but no harm in asking. I would hang as many things as possible on that wall to make a feature of it. ie. a couple of large paintings in your preferred colours, mirrors, photographs and anything else to fill the wall as the TV unit is definitely limiting and you will be looking at that wall every day.

Personally I would always go for a consistent style throughout the house if at all possible. Expensive if you have to make a lot of changes to achieve it. I guess it comes down to how much it bothers you.

Thank you for your comments. Dreamer, I do agree that it seems a shame to lower a high ceiling. Thanks for your suggestions, Kate. Notice the cornices are different? Not sure why they put a narrow one on the stairwell section! If we put the cornice around the corner, would it be better to replace with the wider one?