I personally would use the lighter shade of the coral-terrcotta color you choose for the furniture.
I would not divide the wall in to upper and lower - it's a small room with lots of stuff, so simplicity. I would "whitewash" the pine using a white or cream colored stain that allows the grain of the wood through. I have used American Decor chalk paint in "Lace" and then wiped much of it off after 8-10 minutes. Easy and a great look. Another I like is Zar woodstain in #139 " Coastal Boards". This is oil based so apply with food ventilation. Brush on & wipe some off. No need to further seal the walls.
I did the bathroom in a whitewash 15 yrs ago with no primer or wood treatment . It came out so uneven I finally covered with paint. But I will look into the oil stain . So many better options now 😄
Here's my 2 cents...I would leave the ceiling alone, do not touch it...I would paint the walls & trim a very light cream(almost white) color. This will make the room look larger than it is. This will make the furniture you have pop off the walls. IF you don't want to give up all the stained wood...You could leave some small sections here & there thru the room. I would also put up a contrasting color curtain(dark royal blue) up in front of the closet. To close it off & keep the room from looking messy.
My husband so loves wood and I think it just makes me feel like I'm in a cave! I need Light! I think painting the furniture and insets a very light color or white would break up the overwhelming wood. Also, ditch the black frames and get light with a light neutral matting. There is so much you can do with the accessories to break up the overwhelming feeling! And it would be easier than sealing and priming the pine.... I have no more to say about the bedroom but for the bath, I would reverse the wall treatment as the tub has the color on the bottom and white inner/top edge. It would make the bathroom feel more "done" if you matched that. Just my opinion.
I am not the greatest at putting colors together. But here goes, I would keep the walls looking like old wood planks and using a dry brushing of lighter color such as a pale cream or off white. I would also as an alternative maybe lightly sanding the walls and refinishing with a lighter shade of Min-wax. Well that's my 1 1/2 cents but I am sure whatever you do will look great.
I'd white wash/cream wash the wood so the knotty pine still shows through, but it's not as dark.
Whitewashing the knotty pine would retain the beauty of the wood and would greatly lighten the room.
Sand then whitewash the walls.
I'd like to offer two colors: Ancient Marble by Sherwin Williams, and Sundrenched Sand by Color Place (WalMart). Both will brighten your room. Have fun.
When viewing your space, one thing that strikes me is that, along with the wood planking on the walls and ceiling, all of your furniture appears to be dark brown wood as well. Before you tackle a full-on painting project, I would start by painting out the ceiling (leave the beams natural) and then the trim in a soft light color. Add a closet door and paint that the same color. Then remove some of the dark furniture and either paint it or replace it. Remove the dark shade on your light fixture, find a pretty light comforter and shams for the bed. That beautiful ocean picture over the bed could be your inspiration for the entire space-choose a palette from it and run with it. Since the room is so small, you want to edit what you have in there so it won't feel so crowded and dark. FYI, I find that whitewashing knotty pine sometimes just enhances the knots and appears quite streaky and "polka-dotty", so if you decide to paint, go all in!
No matter what you decide to do ...be SURE to use KILZ2 primer or the knots will come back in 6 months. Trust me on this!
White wash them.
Alternate white and yellow to liven it up!