To cozy up the tall space, I recommend painting the ceiling two or three shades darker than the wall color. I wouldn't break (chop up) the walls with crown molding. I like your shiplap idea but make sure the stain/color works nicely with the wall/ceiling color.

Don't let the walls intimidate you. Decorate where the people live - under the door frame level. If that is done correctly, only the drapes and fireplace will pull eyes up.

It will be cozy if you place drapery panels on the bottom windows. Consider linking the top and bottom windows with moldings like you see below. Make sure you select a chandelier mounted in the center of the upper window. Area rug with sofa and lounge chairs and large coffee table is always a plus.

I'd go darker. is your reclaimed wood the grayish tone and will it just be that narrow spot above the fp or that entire wall?

i think if it's something like this, a darker ceiling could be dramatic. depends on what you want. some like a cozier feeling to a room and others like it bright and airy.

Look at the paint chip for Amazing Gray, then go up one or two shades darker. This will assure the two colors will coordinate nicely.

I agree 50% is the standard thought for ceiling paint color taken from the walls. (Especially 8 - 10' ceilings) But this ceiling is so high that the space will feel "hollow" and not cozy unless the ceiling are "brought down". Here is dark ceiling that cozies things up...

Really liking those all that natural light. Sad that none of the windows appear to open for fresh air. Hopefully there's a patio door in an adjacent room?

Decorate the walls of a two story room only up to about 8' (or , in your case, perhaps a bit more to create a visual line just inches below the upper windows. You might even consider adding a 4" horizontal trim board all around the room at that same height after all the painting and/or paneling is done.

You could choose wood floors (medium to light finished shade) and use the same coloring/finish for paneling above that horizontal trim board. If the rustic ship lap panels you intend to use are shades of gray, choose a similar coloring/finish for your wood flooring -- and you should use wood flooring rather than carpet.

To add color to the room, consider hanging window sized stained glass panels at each of the upper windows.

https://www.bing.com/images/search?q=images%20stained%20glass%20home%20window%20art&qs=n&form=QBIR&sp=-1&pq=images%20stained%20glass%20home%20window%20art&sc=0-36&sk=&cvid=5601E75F568B4FF5AB8B6AB87A504827

Here's a painting trick to lower ceilings, but it does draw a line around the room which I find to be more of a distraction.

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https://www.houzz.com/photos/great-room-farmhouse-living-room-san-francisco-phvw-vp~41754085

https://www.houzz.com/photos/harp-residence-traditional-living-room-new-orleans-phvw-vp~85633479