As others have said, it depends on the space. As a child I loved velvet flocked because it was so "touchable" LOL! In my extended family we tend to use the velvet flocked in dining rooms, the foil in bathrooms, and a high quality wallpaper in other rooms. The design is totally reliant upon the space it is being used in. In our Victorian farmhouse most of the rooms have the big roses or hydrangeas appropriate to the period. The dining room has a gold foil with red velvet (see below). Photo taken by my cousin.

Thanks a lot for your comment. I wouldn't exactly call it a walk in-closet. As you can see from the drawing, Its space provided for two single wardrobe (one on each side). Maximum width can be around 3.5 ft. The humidity point is quite relevant. The question is would it be possible to include a wet room in the space i.e. 6ft x 8.6ft. - considering I don't remove the dress wall. Wanted to get a sense on the possible layout. Thanks and look forward to your advise.

you shouldn't use any dark color nor too much of light color. According to me, ash gray color would compliment the room but again that depends upon your color selection of your clothes.

I feel partitions are not needed. You already have too much for the space. Adding a partition will shrink the space further. The simplistic solution, you do not wish to discard any furniture would be to paint all the walls in lighter pastles. And use some wall painting frames to highlight certain walls.