I don't know how deep your ledge is, but here is what someone else did with theirs.

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It wraps around the entire room and rest of the basement too. I don’t want to make the space smaller by building it out I just am hoping to modernize it

Ours isn’t very deep, I would say maybe less than 3 in

If you only have this one wall section why not frame out and drywall flush. You will have a deeper window sill.

Here’s some photos of the rest of the basement ..

@fnmroberts it wraps all around the room

Ignore it. Why did you not paint the entire room blue?

I don’t want to make the space smaller by building it out

???

You build out the top portion; the floor space remains the same.

Or you frame out the entire wall and use the space to add more insulation. Which is a positive. It isn't a space like a bathroom or a kitchen where every square inch has to count.

I’m tired of always seeing board and batten and two tone walls

You don't have any board & batten but you do have two tone walls. Why?

Because the ledge goes all around the room and you would lose overall space, not floor space.
Because I bought the house this way I’m obviously asking for ideas for a reason .. bc I want to change it.

Incorporated the ledge into horizontal banding.

the cream paint is what’s making it read more country/cottage - changing that will change the look - right now you have very high contrast with the paint so it stands out

the easiest way to “modernize“ it is with paint - agree with @ci_lantro - if you paint the whole wall and the ledge the same color, it will pretty much disappear -

you could also paint the lower wall and ledge the same color and add fabulous wallpaper on top

It will give the kids someplace to set their beer cans down when they are older and have parties when you are not home.