How can I better use or camouflage this space.
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What a wonderfully large room! I would put a humongous dining table in there and host dinner parties every weekend!
I would leave as is. Since it is now a dining room space, decorate it with your China, silver and art pieces instead of storing away in cabinets. Could look really chic and elegant.
On one end the shelves could be set up as a dry beverage station with an ice bucket and glasses, condiments for beverages. A great place to set out appetizers too.
Also a fantastic display area for seasonal decor if that is your thing.
I also love the shelves. I would paint the backs a neutral color, They would blend in more with the room and not be overpowering. Update that cabinet or paint it and use it as a liquor bar.
As a china collector I would love to have those shelves. Remove the cabinet in the middle and replace with two shelves to continue the look. If you don't like the red; repaint. The shelves are unusual and I don't see what needs to be "updated" about them. You could intermix, books, with china, with collectibles, with candles, with sculpture, small framed works of art with baskets, with boxes, vases, plants etc. etc. etc.
I agree with Emily, those shelves are great. What looks wrong is the brown cabinet, I would replace with a shelve or build in a flush white cabinet.
You could put small art in the top shelve mix in some lovely China plates, vases, nicknacs or books. But not too much.
I like the red at the top, but feel the lower shelves should be lighter or be bold and go with a bright contrast.
A large rectangles dinning table would look great.
You could add an additional shelf to replace the brown cabinet and continue the look. Or A ventless fireplace in that open space. The floor can be painted. It is a large room but you can paint entire floor and stencil a rug area or border the room or an all over pattern. There is a hometalk project today for stenciling. I will link for you. Hope this helps
https://www.hometalk.com/diy/paint/how-to-paint-tile-floors-with-a-stencil-36896576?
How to Paint Tile Floors With a Stencil