Colorful accents liven this small cottage living room. See the rest of this cute cottage-style home: http://www.bhg.com/decorating/small-spaces/homes/small-but-mighty-cottage-home/?socsrc=bhgpin062712#page=3 Decor, Ideas, Coffee Tables, Living Rooms, Living Spaces, Livingroom, Pillows, Bright Colors, Small Cottages
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A pretty patterned sheet, tablecloth, or fabric hung behind the bed makes an instant, laid-back wall accent | BHG
I like the basket next idea for next to the rocking chair. Maybe it could be where the cat and dog toys could live. A cover would make it a great hidden storage and it would be in easier reach for us to play with them. If it was strong enough we could sit on it and it would double as a place to put on your shoes when going out the door.
Gallery walls can be a little overwhelming if not arranged properly (aka you CAN get them wrong despite what the blogosphere might tell you), but this one works well here.