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I would build a storage bench with a hinged lid that fits snugly in the nook. Then add a few shelves or bins, depending on the usage. Books = shelves Dolls/stuffed animals/toys = bins.
How old your granddaughter is would make a difference. If she is under 6 then I would suggest a toy box with a lid that is padded on top, bookshelves for books and shelves for favorite stuffed animals and such. Above 6 I would put in a small desk for drawing, coloring and homework. Shelves a little higher for books and puzzles. Preteen and teen a desk, maybe a glam mirror, a cool lamp and a phone charger and jewelry hanger. Good luck!
Here's a tutorial for some easy-to-make shelves that are great in a nook: How to Build Basic Wooden Shelves
Pinterest has so many ideas for you: https://www.pinterest.com/explore/diy-storage-shelves/