Playroom in a closet under the stairs. Twinkle lights, bue/turquoise. Cubbies. Dress up. Paper banner. Target decor. 10x3 foot space with low ceilings. Check out this blog for more home organization tips for small spaces.
I love this little reading nook as well. when I took over my sister's room after she moved out, there was a small closet that I loved. I would throw blankets and pillows in there and use to to do- whatever. Read, talk on the phone, whatever I felt like doing.