What you shouldn't do is turn the bed into the room; its small enough as it is. I suggest just shifting the location of the bed more in the center or the wall its on (the one without the windows). And set it up kind of like daybed style. I also notice that there is a trundle bed underneath.. that will/should still leave space for that. Then either switch the night stand and the dresser so the smaller/less utilized piece is behind the door and the dresser which I'm assuming shes getting clothes out of every morning to the other side where she wont be blocked by either the bed or the open door. I agree with everyone on a desk under the window. (don't worry about it blocking it or anything, you'd be surprised how little of an effect that really has on the bigger picture). Wall color? i would stick with something neutral not like a sandy taupe color, but definitely not something she'll regret or want to change once shes older. Maybe something like a light grey with blue undertones to compliment the teals and greens. Add solid or vertically striped panels on the windows all the up to the ceiling. You could even mimic that behind the "daybed" and bring them up to the ceiling again justifying the bed on the wall the way a headboard would. Accessories should be unique pieces that she can grow with and wont be kitschy in a few years. Mirrors and lots of light also brighten up small spaces! :) good luck!