Not-so-Extreme Room Makeover

It shall forever be known as the Junk Room.

To say this room has been through many transformations would be an understatement. We can't figure out what to do with the space and it just can't seem to shake the junkiness of its initial junk room status. Nothing seems to have its place and it's driving me insane.

• Junk Room - It kept full-then-empty cardboard boxes out of the way when Jamie first moved in. The red rug was added for an initial attempt at decorating the little room.
• Empty - v.uninspired. I think we got the bookcase on the right to help organize the mad paperwork and binders and magazines and jamie's spongebobsquarepants bobble head (huh?).
• Gym - We built our treadmill in here and stored our weights and ab-ball next to it. Uh, great intent, but I think we spent the least amount of time in that room with the damn treadmill. It's since been moved out to a corner of the kitchen and I've used it three times (progress, you guys).
• Guest "Bed" Room - We stayed at Devon+Patrick's and thought their raised-aerobed would be a perfect addition to our place for any future guests. It fits in the open space with 3 inches to spare on one side, door barely closes with it in there - snug as a bug in a rug. I got the chocolate brown curtains to go coordinate with extra bedding for when sister Amy came in January and thought it was all pretty cute! But folks haven't visited with enough frequency or length in time to really justify keeping it inflated all the time so the bed's being stored in the back of a closet.
• Office + Craft Room - I had been taking over every corner of our place with the fun creating I've been doing and was also feeling generally unorganized with real-work stuffs. I had managed for awhile with my laptop and miscellaneous file folders. The crafting, however, was getting ridiculous. Not v.compact and definitely required some desk space (can't rightly keep the sewing machine on my lap). One night, when Jamie was out of town, I moved all the bed stuffs out and threw a couple of planks onto TV dinner tables, creating a makeshift office. He really likes it when he comes home to everything moved around in the place. Especially when he can't find anything and I'm not home or not answering my cell phone to tell him where I moved it. I blame Devon every single time ("i learned it from watching her!").

Now that this mini-room has discovered its true identity, it'd be great to make it as aesthetically pleasing as possible! I'm inspired by well-organized craft rooms that have been gracing my internet browser and by all the hours of HGTV I put in. For this quasi-makeover, I'm placing plenty of restrictions:

1. No paint change on the walls (tongue out to our otherwise v.nice landlord).
2. Cost needs to be kept as low as possible.
3. The space is desperately needed for storage. Jamie's home office occupies a corner in the living room so he needs a different spot to keep various paperwork, binders, etc. I need a place to keep old magazines, paperwork, crafty stuffs, and whatever other objects I gather throughout my day.
4. The table is way too low for me to sit at comfortably for long periods of time. I've been using that footstool as my chair and my back isn't able to take it any more. Am I getting old?
5. I store most of my clothing in the closet off to the right and there's a floor-to-ceiling shoe rack that does its job of, you know, holding my shoes. These things can't change. In fact, I'd love to really make this a big ole closet, but there are just too many needs for it.
   

Here's my inspiration:

Clean lines, punchy color, more fun, and less junk. I wonder how this is going to turn out! Stay tuned, I guess. And leave any suggestions or links to products if you can. I need all the help I can get on this one. :)