I'd probably look at the cost to have it drywalled over to create one expanse of wall. If that was cost-prohibitive, I'd consider adding shelves and making a storage/display area for dishes and other dining room items.

Hmmm. Is there room for a small bar cart or cabinet (if that is something you are into and could use the storage?)

Can you show the rest of the room? Maybe storage for china and serving pieces, art above. A dry bar using a buffet. Do you entertain? Formal or casual, family or happy single?

I love this mirror and granite topped buffet. Do you have a piece of storage furniture that would fit.

Iron Work, hand forged custom Iron stairway for Luxury Home in So. Cal · More Info

Alcorn project · More Info

What is behind the alcove wall? Would it make sense to open it up from the other side if you don't want the space in the dining room?

I know I need storage in my house and am interested in finding and accessing hollow space, like under the stairs, rather than creating more hollows. With that idea, you could have a closed off closet with hidden push latch door. Storage that doesn't interrupt the wall.

From Palimsest's post: a phone booth!

But seriously, a chest with fabulous mirror or art above, or maybe a highboy.

Or, as a closet, you store linens on rods, or serving bits in drawers, or table leaves. Lots of good options.

That cubby is gold! You get to have dining room furniture that doesn't affect traffic patterns. Look for a 36"-40" buffet or china cabinet. Here are a couple options:

Boyce Wood Buffet, Black · More Info

Deny Designs Khristian A Howell Nolita Drops Credenza, Multi, 38" X 30" X 20", W · More Info

Redmond Solid Wood 39" Wide Medium Storage Cabinet In Rustic Natural Aged Brown · More Info

Colonial Display Cabinet · More Info

Eagle Furniture, 40" Coastal Dining Buffet, Burnt Cinnamon, With Hutch · More Info

Consigned Antique Wall Cabinet Indian Paintings Boho Drawer Chest Furniture · More Info

Funny thing, I love the inspiration photo above and just found out it is a screen divider, not a mirror.

An actual mirror in the exact same pattern-- Basset Mirror Co - Osburn Wall Mirror https://www.bassettmirror.com/shop-products/mirrors/osburn-wall-mirror-m3576.html

Other mirrors with a similar look:

Uttermost Misa Gold Square Mirrors S/2 · More Info

Piazzale Gold Square Mirrors S/2 By Designer Grace Feyock · More Info

Here is the mirror on Houzz. It wouldn't show in the search but now it is stalking me. LOL.

Osburn Wall Mirror · More Info