Since it's in the entry, how about an arched mirror? Or a vertical piece of art. Paint it in the same colour as the wall in either case. No need to highlight it. It doesn't seem deep enough to hold much so you can also consider filling it with drywall, especially if the trim can easily be removed.

ETA: Meant to qualify this: No need to highlight it if you don't like it.

I think that I would paint the interior (back wall only) of the niche a darker tone of what you have on your walls and then hang a beautiful piece of art there.

Perfect place for some dramatic art!

Have some trompoli

Oops I meant have some trompe l’oeil plant painted in that area❣️