I think you should stay with a simple pattern for draperies. Possibly a pattern incorporating the white trim and warm yellow walls. This would be soft and understated and something that you wouldn't get tired of easily. Other colors could be introduced with accessories.

Installing curtain rods at the ceiling is a great way to add height to a space, but the drapes will cost a bit more because they will have to be longer. You might get a better picture quality if you installed a projection screen over one of the windows which could be raised out of the way when not in use.

Thanks everyone, I'm planning to get my floor tiled up soon, and then later the whitewash. So before all that, I wanna do away with the construction part, if required to transform this hideous corner. I had the roller blinds in my mind to hide these iron windows, but I will also look at options for changing them windows entirely if budgets allow. I might have to use some false ceiling work as well. Posters, I don't think can find space here, but a lounger sofa-bed is a surething with some nice lights. Please do share some pictures of the lights and loungers and floor tiles if you may, for suggestion. I'll be obliged. Thanks again!

Not too sure what you are trying to hide. If it's the loft, I would suggest store the stuff in the loft area elsewhere and use the loft to display decorative pieces/collectibles/books, especially since they are out of reach. Use the loft space you have, don't hide it.