I'm usually a fan if midcentury kitsch, but that door chime is huge! if its original to the home, you may find a buyer for it online... You can replace it with a modern small chime high up ( find the wire in the wall), or simply a wireless chime anywhere in the house.
The niche for it will give you a lovely place for a piece if art, or a flat sculpture.. Something to make you and your guests smile when the door is opened.
Given the wood color, I'd probably paint the entry a darker ivory, and paint the niche a grey or greige to really highlight the art.
Your most time consuming task will be removing the wall paper. and prepping the walls for paint.
good luck. I, too, like the floor.

I love the chimes! I also love the slab golden doors, I would strip the paper and paint only walls white allowing the floor, chimes and doors to be the stars. If white is not your thing a fresh green might play well with the floor and wood tones and grey in living room.