It’s a mountain cabin, leave the knotty pine. I would, however, brighten it up with lighter colored fabric on the furniture.

Leave the knotty pine. There are other ways to brighten up the space.

Leave the knotty pine. Maybe place white area rugs here and there? Or large white paintings. And yes, white furniture, too as flopsycat1 suggests. In addition could add some black or dark grey. We have knotty pine on ceiling in our new build (house) and made it look more contemporary by having exposed metal beams, dark hardware, hearth, see attached. In our case we stained the knotty pine slightly brownish red. Our wall color is very white, to offset all the wood. The metal color is called "iron ore". You may also consider converting a couple of the walls to white or another contrasting color; not painting but just remove some of the knotty pine in very selected spots and drywall and paint, just an idea.

We have a full on knotty pine cabin and will be leaving the ceiling and trim in natural pine but painting the walls an off white. It is just too dark with floor to ceiling pine.

I’d also leave the knotty pine. I found another beautiful example.

I doesn't have to be all of the walls...you could paint just some walls white. Leave the ceilings as is.

Consider a railing for the step down. We had to put one in our cabin...people were always walking off the step unawares or running into it from the lower floor. It also keeps people at the table from pushing their chairs backwards off the edge.

Live in the house a while and see if any areas could be brightened up with the white.