How would you decorate this space?

I hope you don't mind, I added a few things to your picture to suggest an option. I was thinking about what you said to one of the commenters about wanting a reading nook for yourself and a guest space for hanging out, like your husband wants. So I thought maybe something like this, a mini bar or a coffee station and a cozy reading nook. It's just a suggestion. I love decorating☺

Maybe a love seat, small entertainment center, throw rug, and for nostalgic reasons a bean bag chair and a lava lamp to put on the table. Just a thought

Rug 100%.

I would make it a, reading space so bookshelf.

Light.

Seat I can lay on and read.

The picture needs a white mat and thin black frame. Red seems to be your accent colour and it's a modern Italian theme so far. Best to stick with it. Red, black and grey. White of course. Your secondary colour is green in whatever plants you add. Green compliments red very well.

If you're in the books, maybe a wall library with maybe a real cozy swing for sitting back reading

I think you have to start with asking yourself what the primary purpose(s) are for the room, which will then help you determine orientation, arrangement…then its colors lights textures , and then pieces. If that helps…

A little bigger couch. Lol

You could try something like this...

a modern rug, not some bulky persian thing. definitely some plants.

Nice having so much open space tho eh?

The rest of the couch would be a good start!

first what would be the space's function?

A hanging swing if it has the support above