how many square feet are there? and what is going on in the rest of the room or area this is opened to?

It's 8x9 so not super big. In the pic below, the entrance into the alcove is on the left. Straight ahead you can see the rest of the space. Bar on the right, living area ahead with large built in tv/entertainment stand on the left wall. I hope that helps

What about a reading nook? Big comfy chair and ottoman, lamp, bookcase...cozy!

Can you post a photo of the furniture piece you wish to use?

Love that "gal nook" idea. Add some glam wallpaper, soft large rug, light fixture, comfy seating...

Art gallery, wine tasting area:

This was my grandmother's when she was a girl so it's very old. I want to refinish it and store wine glasses in the top area. Unsure of colors. My contractor offered to build in a bench for cushions and pillows etc too

Oops here's the photo

Photo didn't post.

It is very sweet!

Put the antique piece on on the left side wall. Place a cushy L shaped sectional on the other two walls, with lots of accent pillows, a round metal coffee table, chandler and wall sconces. All on dimmers. Colors and style would depend on what you do in the rest of the space. Wouldn't have to match but should blend.

some inspiration for sitting area

Think about what do you like to do? Read? Visit your friends & drink wine? Play games? Have tea parties? I'd think to myself, "What would feed my soul?". I'd go through the options and choose the one my heart desires. With the purpose in mind, the decorating will be self evident. LOVE your grandmother's hutch. It was a real work horse, obviously. I'd take it down to the wood, sand it and see if it can be restored that way. If you like paint (I don't) you can paint it any color you want to make it pop!:) Or keep it neutral as it would have been originally. I might replace the counter top on it. It would still feel authentic. Enjoy!:) Let your deepest desires help you create just what you want/need/would refresh you & make you feel good.

I put a library in ours.

Thank you for the advice on the hutch, I will definitely try taking it to the wood first and see how it looks. I found a couple chandeliers (see pic) and a very girly rug. I'm a big fan of aqua shades so will try to mix in this color somehow (throw pillows etc). I know this sounds crazy but I have seen a furniture piece with aqua and orange and it blended quite well so that's my goal, IF I can make it look right. I'd like the space to be my quiet reading space as well as my girlfriend/wine/chatting area so I think I can use it for both.

Many opportunities in a space like that, using mirror, you could make the entire space look larger and brighter. You could utilize it as a wine cellar and or library which is what I did with a similar space. You don't need expensive wine furniture or book cases to make it look fantastic. I would make it special by hanging a small chandelier, switched separately from the remainder of the lower level lighting. I know that's a very obvious suggestion but I try not to take anything for granted when it comes to contractors.

I can see a grasscloth paper on the walls in aqua. That and a comfy white rug on the floor.

I like the "girls wine corner" idea, but in order to make it cozy, not claustrophobic, I'd suggest careful thought about how to do that. Proper lighting, possibly very large mirror, reflective wallpaper, etc.

Or, go for an eclectic mix of furniture. I love this sofa and the blue accents. Looks like a great one to stretch out on with a book.

We had a customer who created an awesome built-in nook for his basement. Although this is a reading nook, maybe it can inspire some seating ideas for your wine corner!

Well, not as much fun as those ideas, but w/ the space I've lost recently due to enlarging bathrooms, I'd make it an off-season closet. Love gramma's hutch. It could go in the closet for gloves, scarves, hats, etc.. Would also be nice in a entry, kitchen, bedroom, etc.. Nice to have the basement finished. I'm still on bathrooms. Best wishes.

I'm with the last comment or on the off season closet if you think you could use it. We did a similar area that way and I'm not sorry. It still has no door. I need the perfect door because it is at the bottom of the stairs... I love the wine tasting bar idea though.

It's always a struggle....fun or function! LOL

Perfect door is a sliding barn door!

Barn doors: