I would say valances. One continuous bay window valance, and then one on the door. Here is one idea:

Valances are very dated - don't do them.

I would recommend simple drapery panels. It will finish the room and create height

Village Townhouse Living Room · More Info

Same treatments are in the adjacent family room. Need something for that room as well.

Panels would look much more up to date than a vallance.

soft sheers at the window would look nice in this space and you could also carry this idea through into the living room.

I agree that valence is dated a would not complement a contemporary design.

Looks lovely.