I would paint the walls cream and the baseboards and window surrounds white. Cream curtains, perhaps with a self pattern. I'm afraid the biggest problem is the lack of color in your room. Much more colorful Oriental rugs would ground everything and make this area looks much more welcoming. You could then take colors from the rugs for the throw pillows. The ones you have are drab and add nothing to the decor. These are nice rooms but breaking out of the neutral rut you're in would really make these spaces come alive. Colorful curtains will make the rooms look smaller, when all you would want is for them to add softness and warmth to the room.