Put it wherever it's the right distance to reach over an grab your phone, book, water, etc.

I would change the headboard !

What are the small holes on the bed frame? Can you lower the headboard?

This would really bother me.

My cousin bought a queen size bed that was at least 5 to six inches too long for her queen matress. What is going on here aren't bed sizes standard? Sloppy quality control at the manufacturer.

I would put the nightstands in front (as in the 2nd photo). As for the mattress size, perhaps you have a California king which is narrower than a standard king -- 72" versus 76".

How long have you had the headboard? Can you return it? It's really awkward looking.

Place your nightstands, which appear too small for the room and bed, a few inches away from the headboard.

A king size which is also known as eastern king to some people is going to be the widest mattress at 76 inches wide by 80 inches long.

A california king size is going to be 72 inches wide by 84 long making it the longest possible mattress, but it is 4 inches narrower.

Bev, her headboard is never going to look like the pretty ones you posted because of the way the wings just end in midair causing the gap.

Maybe you could use bigger pillows to cover the gap? And then place the nightstands as you show in your second photo. And add a bedskirt?

The only other option would be to have the headboard cut down to look like the ones Bev posted.

Curious where this headboard was purchased?

As you are already aware, the california king is not working with this particular king frame/headboard. Short of replacing your mattress w/king pillow top, I would consider new duvet/heavy down comforter to pull up under pillows to hopefully disguise/block view of holes and fill the gap/space.

The nightstands should be placed where you can most easily use for function; they look best away from bed as in photo one with gap filled w/comforter. Taller lamps would help keep eye up and away from the view of the headboard holes etc.

Try lowering the headboard one notch it will help hide the miss match edges. Then put the night stand where you feel it works best for you. Your nice bedding and taller fatter lamps will make everything look great.

It looks like your headboard wings are unfinished. I would want to continue the construction of the wing to the floor for a footing and either match the headboard material or if you can't get a match, use a silver fabric to match your nightstands. At the same time you construct the rest of the wing you could have it "L" in a piece that fits in front of the holes and have that covered in a matched fabric also.

It looks like you need to drop the headboard down, so it can wrap around the mattress, as showing in Beverly's photo.

If the next hole down is too far, can you drill an intermediate hole between the two existing ones? I do think the headboard needs to be a touch lower.

It definitely looks cleaner to hide the unfinished part of the headboard by placing the nightstand in front. We typically bring the nightstand out a few inches from the wall regardless.

I'm not saying it is the right answer, but I have the same nightstands and the legs just screw on (I saw them assemble it), so you could just try unscrewing them to see if you like it that way.