If I were you, my first step would be ripping out the bathroom title around the fireplace, since you really don't like it. Start with that area and decide how you want to redesign your fireplace surround - what materials do you want to use, what style, are you adding a mantle. I would do that before moving to any other steps, since that's going to make a huge difference in the room.

I would also take off the valance on the window, and look for some lighter, maybe patterned curtains. Choose fabrics and materials that give off the cottage-y vibe you're going for. Once the fireplace is updated, move on to the windows, the bedding, consider adding a seating area by the fire if you want - but start with the fireplace surround, since that's not something that will be changing once it's been updated. Curtains, bedding, etc. can be very flexible, but furniture and attached decor is not.