I like where your design is going!! Those couches definitely look cozy! Would there be a way to push the smaller sofa into the corner, and then move the longer one further down the wall away from it? I think that could really open up the space.
My instinct with the rug situation is to get a large, fluffy or colorful rug, about 9×12 or maybe 10×14? A Moroccan shag rug like we put in Maya’s or Patrick’s rooms would add a great touch. Add a big, square coffee table to ground the area (plus to store cute books and decor!)
The nice thing about the color palette you have going on right now is that you can either add in pops of color, or you can keep it in a neutral space. A great way to make this decision is with the curtains — choose a lush fabric and install a long rod with 2 panels on each side for a full, cascading feeling.
As a last note, I would say to switch out the ceiling fan for a chandelier if it’s possible!
Hope this helps! Excited for how your room will turn out!