Oh I forgot to add, sink is out as well.

I would use birch or maple for the bookcase and color match it and floor trim to the cabinets.

Just a heads up--Both maple and birch are very, very difficult to stain. Probably should oughta' consider another wood that is easier to stain. Disregard if you're using factory made & finished cabinetry.

Fix the sink and make that right side into the wet bar it was meant to be. Do you have enough closets/storage? Maybe the left one should be a closet and you can add bookcases as free standing furniture elsewhere.

I like that idea. We're thinking the same thing regarding the built-in. What would you do regarding dimensions? Go wall to wall with thicker boards to prevent sag? I was thinking about bringing each side in about 6", and maybe starting about a foot or so up.

As for the small storage space, how exactly would that work. Something like a 1' cabinetry along the bottom.

I like the idea of a nook. I saw some photos of deeper nooks that had bookcases which wouldn't work given the overall space. But a single shelf higher would work.

What's on the other side of the area on the left? Any chance you could reclaim part of that for the room behind, if there's a room back there?

I like the idea of a reading nook where the section with the sink is, but the other section is kind of deep to house book cases without base cabinets. If you could use the space in a room on the other side of the wall, you could have standard depth bookcases m/l flush with the stub wall. IMO it would look fine to fill the whole width with bookcases--you don't have to pack it with only books, you can include some decorative items for display.

If you really want to get fancy, put the bookcases on casters, or use hinges, to provide a 'false wall' and keep treasures behind it in the secret space, as shadowprovesunshine suggested.