Don't decorate that upper level at all. You've got the beautiful sky and greenery right out the window. You can't improve on that. What would dramatize the space is to pare down at least half of the small objects on your shelves. In the niche, just have the vase--the other items in that space detract. On the other shelves, only display the most beautiful objects from your collection, those with natural colors and dramatic shapes. Remove everything else. Less is more.

Anchor your two armchairs on a beautiful rug in blues, greens, and tans to echo the view out your upper windows.

Aurora Marble Rug, 5'x8' · More Info

I would avoid decorating above the level of that crown on top of the fireplace and bookcases. Keep decor where the people live and eyes won't tend to drift up into the void. The best way to keep the focus on the living area and not the ceiling is by styling the shelves properly. That would be with 1/3 books (standing, leaning, or stacked to hold another item) 1/3 large decor pieces that can be identified from the seating, and 1/3 open space. Right now you have lots of "littles" there that can't really be identified. Are the shelves adjustable; are they lighted? Would you consider painting or papering the backs of them? You can do a non-permanent backing using luan or foam core custom cut to fit the backs of the shelves. Paint or paper it and you can even switch them out seasonally.

I don't think I would decorate that wall either. If you rally feel the need to do something, then I would do an accent paint color that comes down into the back of the shelving.

Also, I'm not sure why, but I don't like that molding - it seems way too heavy.

Hmmm that's a tough one

Wow- thank you all for such great comments and ideas. You have helped me change my perspectives! Grateful!!!