If you could paint, that would make the biggest difference. If you really can't, I would use the sage wall as a starting point, and look for bedding that is fresh and light - greens, blues, etc. Then find lamps with a colored glass base and white shades.

Unfortunately, you are in a pickle because you'll have a hard time matching bedding to paint. That's why paint is the last step in a decorating process. It can be custom blended to work with bedding, but the reverse is not true. Stay neutral with creams and ivories. Add pillows to match the alcove color.

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You might want to look into this Waverly set- I have it in a bedroom with similar antique cherry furniture. It has a touch of sage, some pale blues, touches of rusty red, tans,beige and browns all on an oatmeal base. You can get a square accent pillow too. It's called Charleston Chirp :

What guest would not love to stay in this lovely room? I would. Maybe not staggering the height of the prints will maintain that traditional look you want. Add an orchid to the dresser with a couple of good reading books.

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And maybe some room darkening drapes to keep the guests asleep.