You have all the reasons to redo the house, its very lifeless and looks worn out. I feel creating a separation will terminate the spaciousness of the room. Adding colours will surely help, Since you have a tan color sofa,I suggest grey, white or light blue color on one of the walls. Add some art works of the color you chose for the wall. This room needs some fillers like , books, throws, candle stands tall and lean. YES DON FORGET 1. Mount the tv on the wall make some space on the floor and Fix a large size mirror ( Wooden Frame if you can afford).

If you can't clean up the painted edge, you could always add a 1x3 piece of wood as molding. You can even carry it up to the ceiling to frame that wallpaper. I don't see that paint color in the wallpaper, or maybe it's a lighter version of the flower centers. Maybe stencil on a design using the darker color, or another color from the wallpaper to help tie it together. Then narrow floating shelves or vertical frames or something in the painted areas it you feel you need it. Maybe turn the bed around so the wallpaper is the headboard.

Pankaj, I just realized that initially you told us that the bathroom area was 12'-0" x 9'-0" and later you mentioned that it was 11'-8" x 8'-0". In the last floor plan, I forgot to change the bathroom with the new dimensions. Below is the floor plan with the correct dimensions for the bathroom. The bedroom is ok, I drew it 19'-2" x 12'-6". The new layout does not change the way things are placed. Everything still fit. The only difference is that the vanity is now 4'-4" long instead of 4'-8". and the toilet is closer to the shower by 1'-0". Can you give me the lengths of the walls K and L. They are the walls between the vanity and the shower area. I will send you the new layout once you give me the length of these 2 walls.

Perhaps a large round table might mean a rug is not at all necessary. It could be a metal tray table, or carved wood like Rebecca Mitchell Interiors illustrates. Ideas also to consider, using multiple tables can be found at http://www.houzz.com/multiple-coffee-tables. I also agree with comments above that some color is needed on the walls. You could then hang round mirrors, or an unusual curved shape like RMI shows above.