You could certainly talk to a cabinet maker and have something custom made to your preferences and design style. You could also talk to a closet design specialist who might be able to utilize every square inch of that space more effectively while working with a cabinet maker. Part of how the space is designed will depend on the age of your girls. If they are under 12 or so it shouldn't be too difficult. If they are teenagers, talk to them and find out what kind of space they need.

If you love that wallpaper, use it in bathroom. Not really right for behind bed. I would go a drum style chandelier. In a silk pale gold. Your bed looks zen or Asian to me. I love it. But, you don't. Need to much with it. Keep it simple a more formal drape on windows, color would depend on wall color and bedding. I'm thinking a dramatic peacock satin. Use a lighter same tone on walls a rich teal. Ceiling can be gold leaf. With alight that cast shadows on ceiling at night. Then your wall paper will tie in. Furn should be mirrored.

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 agree I need a customer wall to wall solution and maybe a full mirror for a small bathroom would look good. The challenge coming are those electrical points. Also someone guide as to what is the right width of the mirror I should put incase I just decide to put mirror over the sink? Is there enough space for framed mirror? The width of the countertop is 26 inch and the height from countertop to sconce is 52 inch. Thanks a lot