You got some erupts work ahead of you. Start by taking off that rand piece of wallpaper. Throw on some LONG (floor length) curtains on that window. In a grey or even white. The room is small so don't use ANY dark colors, it will make it seem smaller. If you need to keep that huge bed, don't put a frame on it! It's unnecessary, and takes up space. If you can, get rid of it and consider a smaller bed, to better fit the crib. If you can paint or want to paint, do horizontal stripes, light colors!!!! White/powder pink or any VERY light color would look nice.

Paint all white. Get a new comforter set with a soft color. Add sheer drapes at the window.