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.

You can work with your currant wall color or go more yellow - that is up to you. If you do decide to go more yellow. get some small inexpensive sample bottles at the paint store, paint some poster board and hang it on a wall for couple of days because getting the right buttery yellow can be hard. A soft yellow and lavender is pretty together but I also like the sea green. When you said a combo of modern and cottage - that made me think of beach cottages, which often have soft colors (including sea green) and unfussy, calm interiors. You can put a large painting up if you have the wall space for it. Many bedrooms have tall chest, dresser mirror, tall headboard and big TV, all which take up wall space. If you can hang the painting without it being crowded by any of the things I mentioned, it should look very nice. If you wish to do a curtain fabric treatment to a wall and you have the vision of what you want - then go for it. I had a friend who did that in collage - only problem was the yards and yards of fabric needed got rather expensive. So, I would start with finding bedding you love. Simple white is good, and not too expensive. However, you might find something else light that you love, or a quilt or throw for the bottom of the bed and the colors and shades might lead you in a different direction for wall color or accents. So bedding first, then curtains, then see how your wall color is and then add accents and art - although your painting can also be an inspiration for colors.

How about starting out with a piece of beautiful Indian textile work as an inspiration for your space, or recycled sari fabric, or similar. With your very bright light, you can go a lot more saturated than more northern climates.

Your drapes look like they're fine. It's hard to see if they're long enough--do they just touch the floor? That would be the right length. Make sure the paint you pick blends with the color of the drapes and the two chairs. The Edgecomb Gray looks like it would work or you could go with an entirely different color and add pictures and rug to pull it all together. Love the color Sea Salt by SW.