The sitting area was combined with the colors of the current furniture and the fabrics I'm suggesting would be combined better with beige, brown and ocher. Also, I suggested some book shelf in order to fill the part of the wall behind the sitting area. I think it would be better if it is made of the same wood as the current furniture. Between closet and bathroom I placed a mirror.
As about the colors of the room I would suggest something between ocher, or white, or sandy color so that can bring more light to the entire room because the windows are really small. I also placed curtain shutters on them.