Here are pics. Wouldn't let me post within the request for some reason.

This might seem too obvious of a suggestion, but what about a large piece of artwork? You can find some great original pieces on Etsy, from artists who are really talented. You could also commission a custom piece for a fairly reasonable price.

I'd look for a large painting on canvas to go there. I have two similar niches in my foyer, and I've hung two large paintings in mine. Not the best picture (and taken from an odd angle), but maybe this will help.

Pick a subtle wallpaper for the back of the niche and then hang a painting in it.

Another suggestion, which requires more work, is to patch it and make it one solid plane. If it doesn't work for you, it doesn't have to "work". In those newer homes builders seems to go overboard with too many niches (in my opinion) in an attempt to add "custom details" that often times end up painfully dysfunctional for the home owner. In the end, you should do what makes the most sense for your design style.

You might also consider hanging two same-sized (horizontal) framed pieces, one over the other. Maybe botanicals or Audobon prints since your decor seems to lean in the natural direction.

I think you need a very colorful textural piece of artwork in there with a long console table below and two small lamps. Trying to post Some inspiration for Art for you but won’t let me post photos..?

Not a Pro.

Paint the back of the niche and then add art.

Some inspiration:

Since your stairwell mirror reflects that niche, i would hang a canvas that fills the space. You can find giant canvases at art.com in the category Loft Art.

We just this week had the 2 in our dining room drywalled over. I don’t like how they dictate the size of art you need to display.