I think shutters will interfere with the child actually using the window seat. I like keeping the shade and using café curtain.

Keep it simple and don't invest too much time and energy changing it.

What is the question?

How can I dress up this space, the window, the big gap between top of window and wall of curtain are brought down. It needs some pizazz and update

Use a cafe curtain as Houssan suggests. Add a matching or coordinating cushion and a good size pillow to lean on. Use a lively print fabric.

This is a good article with photos: https://www.houzz.com/magazine/how-to-create-a-wonderfully-inviting-window-seat-stsetivw-vs~73993272

Can we see the whole space ? IMO shutters block light and view I think it is nice for a child to be able to see the trees I would do a roman shde in a fun fabric and honestly it does not even need to function since you have a blind.As for the seat you do realize that that window glass should be safety glass . I mention it becuase my cousin put his head right through a window above a window seat and needed many stiches.

I would get rid of the drapes altogether and instead put roman shades. You definitely want to get some height for the space since the window is so short, so start the shades a few inches below the ceiling.

Can I do Roman shades above the window? I thought they were installed inside the window frame part? From photos it looks like that shade is rod less?

You can certainly hang romans above the window.

The window seat is being revamped like second photo adding basket storage

Why do you use hem on thr top not a frilly one but ta straight one. it will cover the wall and look beautiful.