Maybe some pics from further back I am not getting the thing at all.

Thank you for reading my post! As soon as I am home I will post from more angles...I was trying to avoid showing off the numerous bad choices re: paint, lighting and rugs!

A professional will need to determine if...the wall with the wainscoting...OR...the back wall of closet is supporting ceiling joists. That supporting wall will have to remain as a "full height" wall. IF the wainscoting wall is the support wall you will be able to "half height" the back wall of the closet. Be aware that "opening" that wall will cause a change in your front entry air temperature.

Opening the wall may be too drastic a step, especially if you lose a closet. I wouldn't buy a house without a front closet, but that's just me. I wonder about changing the color as a start. Finding some artwork - large scale - that you like would be another step. Lighting can be pretty inexpensive and pack a big punch, too.

I realize this is from 2 years ago, but I did exactly what you want to do. I removed that closet entirely. It is NOT a supporting wall. If you go in your lower level you likely have a beam that runs along the middle of the ceiling the width of the house. That is directly below your OTHER wall upstairs (it's deceiving because the square footage is different below because of your foundation). The wall opposite to your entrance closet is your supporting wall.

I LOVE not having that closet. It felt cramped as soon as you walked in. To me, the open feeling I got was more important of a welcome than the closet space. To regain closet space, I modified the very large bathroom closet I had. I didn't need a full sized closet in the bathroom so I sliced it in half. I created a small closet opening from the hallway that provided enough depth to store jackets. Then I added shelves in the remaining space within the bathroom. I decided to leave a large height at the bottom to easily store my vacuum.

If I could do it all again: In the bathroom I'd cut all the way up to the ceiling to get greater access to the top shelf (or maybe add another half shelf in the back - they are very deep shelves). I'd also choose a finer finish - my contractor took builder grade wood and bull-nosed it (rounded), and added ugly supports on each side to hold them up. I didn't know better. I'd also put a door on the front. Maybe a tiny bifold or a barn door slider (might still do that). I later turned the hall closet into a pantry because I hang my coats on the hooks instead. It was a more efficient use of space. I have no regrets losing the front closet. And if a home buyer wanted it, it would be an easy rebuild.

You could turn the closet into the alcove with a bench and cubbies and hooks if you want something like that. It would be right there but not the first thing you see when you open door. A nice piece of art facing door would look good. I understand about poor paint choices, but if you’re here to ask for help let us the whole she-bang, ugly paint and all