Most regions have their own prevailing construction methods and materials that are common and customary to that region. It may be driven by the available raw materials, local labor and their experience with a certain type of construction, and the cost of labor to build. Other factors that drive the different type of construction can be pressures from the environment and climate conditions. One can create recesses in masonry or stone walls but there may be structural weaknesses that become a factor or just more complicated construction that becomes involved. Building recesses in heavy masonry walls verses light stick framed walls can be equally possible. Reducing the thickness of a wall can also affect the insulation capabilities of that wall as well as the structure.

the back wall panels look like ikea besta doors. the hanging cabinet could also be besta boxes, but with customized doors. the console in front of it, you could get a similar look by using a malm console table and cutting it to height. from there you'd want to use a couple of besta cabinets to create the closed off storage. the low bench could be made with plywood and then stained or painted to match the finish of the malm/besta combo you choose. besta cabinets :: http://www.ikea.com/us/en/catalog/categories/departments/living_room/11794/ malm console table :: http://www.ikea.com/us/en/catalog/products/80196480/

I love your wallpaper (?) and those pillows with the dots look great in front of it! But I get the feeling that you have a lot of different styles in that room (traditional, pop-modern, ethnic) and the small pictures don't really add something. I suggest you gather them all on one wall, try to make that niche with the wallpaper the focal point of the room (can you center the sofa or the dining table in front of it?) and if possible, remove a couple of sconces...Do you really need them all?

The headboard is definitely bright and lovely. but the window arch also gives nice rustic look to the room and makes it different