It’s a pretty broad question - what functions do you need from this room? do you need dining, a spot for the tv etc.. - how many people and what ages live there?

Lots!!! but need more info. Room dimensions? What are the "3rd and 4th" walls?

Wainscotting would draw the eye down and ground the space. Board and Batten seems nice for this room. Don't use decor on the upper walls.

Rough sketch for concept:

Okay no wainscotting, but what about the tall walls? Maybe paint them the same white as the ceiling. White would also downplay the cutout for the staircase.

I'd have the whole house repainted to eliminate the gray paint.

I might spend some money on the ceiling to add some details to lower the height visually.

The ceiling lighting needs to be reworked

I guess the room needs a use to start so what will you use the space for ? Answer that then we can help you. IMO no wainscoting in thta space for sure

Any specific questions? What kinds of activities and furniture do you want in here? Who will be using it?

I love the tall floor lamps posted.

“I guess this is a formal living room” A room is whatever you are using it for. What do you need?

It looks to me that there is no proper entryway. I would want to divide the space from the closet and the window opposite it, to be a foyer, Use walls, or use furniture and flooring/rug. But what are the dimensions then of the remaining space?

It is hard to tell what the spaces are like. There are ceiling fans in the space behind, but it is hard to tell what the lighting is designed for. The two chandeliers in the front space look like they are for a long dining table, but then what is the space beyond the fireplace for? A floor plan will generate better ideas.

Without knowing how you live, I think I’d dedicate the front area as a foyer, then a quiet sitting area (maybe a loveseat and two swivel chairs facing it, coffee table and end tables) and the back of the house for daily living and dining.

What Beverly said - the gray walls were a poor choice for that floor. Though the white wainscoting helps disguise the color clash a bit.

We had a large space like this but it depends on what you have in the rest of your home, my son had a large L shape sofa and coffee table with rug,, for large sitting are and a wall unit for tv etc. another area for small 4 seater dining table that could be extended if need be, small coffee bar, and a small assigned area for baby play area.

I think the walls are a color that in no way complimnets the floors so maybe start there with a wall color that is neutral but works with the floor. but the rest needs answers from you Seems you have decided not to answer so nothing gained by us wasting time only guessing.