The most important thing to think about at this stage is where you want the visual focus of the room. If there is nothing else as the focal point, and you do not plan to install a TV, then making this stand out as a prominent feature (with mantel and paint or wallpaper for texture or adding a great piece of wall art) is great. Just keep in mind that electrical code may require that the outlet maintain a cover plate for safety. Please make sure whoever does this work for you knows the local codes and keeps your home safe; you can always "hide" the plate with accessories, which we have done on many jobs.

For me, I would close it up and stick to your first plan.

I would close it up and add a large, colorful piece of art. Then, once your furniture has been placed, if you feel the area needs more "ooomph", paint it out a color that works with your other decor.

The rest of the room looks very plain so this is a great opportunity to add some personality. Something gold and blue I feel like just belongs there. Otherwise close it up and add molding or wainscoting to the walls