Space is actually not a big issue - there are tricks and tips you can do make it appear bigger. As for me,, I live in an apartment which is not really that big. Here is an article http://sandybayapartments.webs.com/apps/blog/show/19513868-practical-concepts-for-little-bedroom-area -- that serve as my inspiration in decorating on how I am to maximize my area. I am sharing this to you for I know this might help :)

So you like purple? Please buy soft lavender curtains, or some with purple printed flowers, I've had dark purple curtains in my old house (3meter high ceilings) and it looks really dark when they're closed. Add a purple sofa or lots of purple accents to keep it calm and friendly. You could paint the window wall a deep eggplant (not the other walls because of light) with creamy curtains.

OK... but the wire wont be lower as it is fixed now. The wire in the pics below is the wall facing each other. They were leveled on equal height but the beam on one wall makes it seem a little above. But i think you guys are absolutely right that up and down lights wont look good there. I think you are right about down lights lessismoore. Would it look good if i go with two different lights on opposite walls??? it would look odd right.

I think I am certainly quite late to reply on this post but nevertheless will put my suggestions here. Go for 2 loveseats in a light/neutral colour against the 7 ft and 15 ft wall. Opposite the 15 ft wall you could put a nice upholstered bench in contrast/printed fabric. Also for a warm glow put a nice standing lamp in the corner between both sofas. You can place a nice mirror on the TV wall and put a nice shelf beneath it and place a lamp there with few knick knacks if the door opens outside in the balcony or is sliding. Also, keep two upholstered ottomans below the mirror which can be pulled for extra seating when required. Place a low height coffee table small one like a 2x2 ft.