Photos of connecting rooms?

Your existing trim around your windows is very traditional and I don't think farmish ceiling planks would be a good match. I personally don't care for the second inspiration photo with a medium height ceiling and all the holes for the lighting. And that most closely resembles your space.

A quick tip - move your rug under your sofa and pull your chairs partially on to the rug as well. A seating arrangement where everything visually relates looks more finished and cozy.

Will you post a photo of the ceiling issue?

Can't you just patch the drywall? Where would you logically stop the wood? Check out Armstrong's Plank Ceiling System.

I would lay out your room like this.

I think you can. Ours is a little different. We have 9ft ceiling in our lake cabin. Although the ceiling has a slight peak, this ceiling works for it.

You sure you have 10 foot ceilings? The photos look like typical 8 foot. If you are going to go to the trouble of putting up a wood ceiling, wouldn't drywalling the whole ceiling also be an option? I think a wood ceiling would look good in your room. But painted white. You already have a brown floor and a brown fireplace. Adding a brown ceiling will make your room look squat and way too brown. Like living in someone's colon. Also, take note of BererlyFLADeziner's floor plan. Your room will look much better rearranged to that. Chairs angled in a corner are a sign of the devil.

In the original post she states that she has to redo part of the ceiling. I'm assuming there was a leak.

we need to redo the center of our current ceiling and the texture will be too hard to match so trying to think of other ideas.

Alternatives:

• Skim coat & re-texture
• Apply another layer of drywall
• Patch & use a skip trowel texture

Can you post a close picture of the existing texture. Not all textures are difficult to match...

Moving rug and chairs is what I was going to suggest and possibly a larger coffee table.

Chairs could flank FP as appears to be enough space. Would you be open to painting wall in a navy?

Nope, nope, nope. There’s way too much going on in this small room already.

With less clutter on the walls and moving furniture, possibly something like this above. Blue accent for color. Not seeing the entire space, still hard to say. Looks nice with your windows and dining table.