Thank you roj leather and Simon for your recommendations. I like the hanging chair and the almanda creeper on the wall. This will certainly liven up the patio.

On your paint problem I can't be much help. This usually happens because of damp -- please get a damp expert to make sure that there isn't any damp lurking in your walls. I had this once when I had pipes leaking inside the walls. I didn't know that. The other alternative is something like painting before the plaster is dry or some kind of chemical mismatch. I do know you will have to scrape all the mucky powdery stuff away and start again, at least on those areas. Don't try to seal and prime and repaint until you know exactly what the problem is and how to fix it.

Thank you Nitin! The dimensions are quite wide to cover so challenge here is the kind of false ceiling that would cover the mess in such a way that it looks neat and optimized from space stand point.

To make space for 3 study tables including your wife's, you must get rid of the steel almirah. Have an extended open wall shelf of 3 rows for books & storage & 2 spaces next to each other for desktop/laptop where there is currently one. The right side wall near the small kids table can be made into soft board for ideas etc and then have the marker board next to it. Above this table can be small open squares for toys/books etc. Use eco blinds instead of curtains to regulate light & cool the room if you want to make the space serious. Remove the clutter under AC and have cushions/fabric seater to make it a lounge area instead. Use mutiplugs or extn wires to reduce wiring. You may consider a good quality designer fan with pendant LED light which will amplify lighting and ensure silent reading or studying. Else, use an effective LED tube on both sides with a blue themed fan.