Spruce up the area with fresh paint. In fact, let your children tag along with you to the paint store so they can help decide. A room painted in a color they love and choose will give them a sense of ownership and pride in the space, hopefully urging them to spend more time in it. (A TV may not be the best idea, though.)
What if you mirrored the desk area on left to be on the right too.....have middle storage area be open bookshelves.....where t.v. is...could keep that open and perhaps put t.v. up in future when kids get older for another t.v./hangout room?