More pictures please. What is the size and shape of room? Are there other windows and doors? We have no idea what exactly we're viewing.

The area rug looks very nice. I would not be quick to discard it.

I also love the rug but it’s not mine. The picture is from staged house by Real estate. Here is the original picture. We want to paint the house and do some minimal changes to make it look a bit modern.

These furnitures or rugs are not mine.

I also love the rug but it’s not mine. The picture is from staged house by Real estate. Here is the original picture. We want to paint the house and do some minimal changes to make it look a bit modern.

Just to give you idea about my stuff/furnitures I will be using in these rooms instead.

Any ideas ?

Can you remove all of the trim from the indented areas and square it off? Finish it with any trim and then hang artwork in there? Paint it the same color as the walls. Changing the shape, no trim, uniformed color will help a lot.