That is a good idea houssaon. Get that end by the stairs closed in, and open up the wall from one side or the other and make it a part of one of the rooms.

If possible demolish that area to create a 2 storey foyer.

Looks odd, I agree. Can you post some photos taken in daylight? How old is the house?

I can take some daylight pics tomorrow. It's not an old house, it was built in 2000. We have considered incorporating it to one of the other rooms, but I think I would prefer it opened up to the 2nd story instead.

We have similar houses in our area. If you enclose it, you lose the added light from the window which makes the foyer below very dark. Depending on what the rooms are flanking the little 2nd floor area, you could cut a doorway to the space and then put up a railing so the light is not blocked. Sometimes we see the space turned into a little desk area or reading area or it could be very decorative as a "Juliet balcony." Taking it out completely is probably a better choice if it can be done structurally. We see dust and junk the kids have thrown up there all the time (I sell residential real estate).

I would not remove it as the foyer will be way tooooooo tall! add the space to upper rooms like an extra closet, alcove, etc.

I am not concerned about losing light for the lower floor, our living room has four windows. It is such a small area, I just don't know if it is worth putting money into it to turn it into a reading area or balcony area. Opening it up seemed like a cheaper alternative, but I am not sure what the result would look like.... Oh, and my kids are always throwing stuff over there, and it stays dusty, it's an eyesore to me. I am just not sure what would be best, I don't want to damage anything.