Even with shelves, it will look too busy next to the lovely built in China cabinet. I would have a door made and jeep it closed. It is better as a closet and should not be open.

How about a coffee bar????? under cabinet refrigerator with drinks handy for the dining area?????? Specialty teas (like teavana teas) or japanese tea. Still part of a dining experience?????

I'd remove the frame and dry wall over it, especially since you don't need the storage space. I think it is just drawing attention away from the pretty built in cabinet.

So, Sajani, I am intrigued. Here is the deal however, I am visual. Any links to send my way? Can't picture it in my mind yet...
PH, Your idea is VERY tempting but the guilt of closing off some space will be a BIG ZERO from my husband. However, maybe closing off the bottom half and then I can put a little desk or some other piece might be an option.
Martha, the door is the other option my husband keeps talking about.
Thanks! Keep 'em coming

What is on the other side of the closet? If you were to drywall over it as PH Interiors suggested - could it open to another room and be useful space? I think it competes with the beautiful built-in too.

i know what you mean :/

How very intriguing. Could this have been part of a laundry chute, or the terminus of a dumbwaiter from the basement? Or is the kitchen on the other side of the back wall (a former pass through?) This history of the space might inform its future, as it were.

I'm a mom and I pick up kid stuff every day. Storage is a great thing. I'm guessing the door trim here matches the door trim throughout the rest of your house? If so, how about installing a new door with a vintage or antiqued mirror inset into the door frame? I'm imagining something not highly smooth and reflective, but a material that looks sort of like mercury glass looks. Then you could pick out a really cool vintage door knob. Paint the inside of the closet and the existing shelves white to brighten things up in there and coordinate with the china cabinet. Then buy canvas totes for the shelves that you can label. You could choose to add more shelves instead. Or install shelves plus a low hanging rod to hang tablecloths on hangers without wrinkles like Martha does.

I think I would extend the molding above the closet to the same height as the china cabinet. Frame it out in the same size and style molding as the closet frame.. Paint the wall inside the molding white. Then place a white door on the closet and use the space for additional storage. By having it the same height as the cabinet, it will almost appear that it was the original design for the wall.

Sometimes exciting and innovative just doesn't work: you have a very strong design statement with the china cabinet. Perhaps quiet and subservient would work.

You could make it go away if you painted the trim the same color as the walls and installed a plain door in the same color. Install shelves sized to fit your less used serving pieces, board games, etc.

Building on sdwilk's idea above with a mirrored door - you could frame it out and install a push latch to open and close the door. That way, it would look like it was just a mirror on the wall with hidden storage behind it. This one is ready-made with jewelry storage, but a carpenter could make one to suit your needs.

How about a beverage area for coffee and tea and all related items. I did that with my dining room closet. It works great for that. It has sliding doors and room for a fridge and a 5 gallon jug of reversed osmosis water.

Going off tsudhonimh above - paint the trim the same color as the walls and consider the sheer drape you mentioned earlier in the same color as the walls - until you put up a door. Behind the curtain you could do matched basket that would store whatever you want to keep there - cards, games, large serving pieces, magazines, desk supplies and files, etc, etc but the baskets will unify the area and not create so much of a visual distraction from the china cabinet next door., especially if you can get them in a color similar to the wall. Also paint the inside to freshen it up as needed so that it looks nice when the area is open.

Lots of great ideas already but maybe you could use a place to charge phones/ipads/laptops ect - we added a closet with doors in our dining room & part of it is a charging area so I don't have electronics on my kitchen counter.

Had some time today. Before & After. Here is a visual for the molding suggestion above.