Is it possible to sew up some fun wall hangings and suspend them from the ceiling next to the walls? Or, there is removable wallpaper, decals or murals that won't ruin the wall paint. If you Google, you can find some. Or if you are on a tight budget, cover the walls with homemade artwork, like framed fabrics or magazine pages, or vintage material mounted on thick cardboard and secured in the back with masking tape. Attach to the walls with removable mounting tape.

Add curtains to the shelving to camouflage it. Get the craft supplies out of sight into containers and stack the shelves with pretty fabrics.

On the floor, maybe you could find a vinyl sheet covering that will just lay down over the tile. You need a hard surface so you can find pins when you drop them and easily sweep up loose threads.

As for the counters, I find that they're not noticeable after you add your cutting mat, ironing pad, baskets of sewing tools, sewing magazines and file boxes of patterns.

Thanks! Any color schemes that you think might work?

I've just recently hung dowels on curtain rod brackets all over my studio wall to hold some of my fabric. It's arranged according to colour, and it's a great for standing back and getting inspired! It's colourful and very functional! Here's one section:

I vote for moving the sewing machine up out of the basement. Put supplies for each project in a project box, and move it upstairs while working on it.

If you could change the shelving, flooring or paint, I'd say to redo the basement in light and bright. But that is not possible, so try to work on fun things in a room you enjoy instead.

Thanks everyone!

You can do many things such as sew some English Piecing Project (also known as EPP) into a nice wall art. I got some storage to put most of my fabric and sewing supplies in containers or cabinets but if budget is an issue IKEA has many solutions. Other than sewing art you can also order art from Etsy that has sewing machines or anything sewing related to decorate as well has peg boards to decorate using your own supplies!