Houzzers! Please help with my serious design dilemma. My husband and I (both 27, no children) bought this adorable little 1950's cape cod house in NJ last year. We love it--but, as you can imagine, space is limited. Our bedroom is downstairs and we mostly spend time downstairs in the living room and in our bedroom. We have two rooms (technically rooms as both have closets) on the second floor that have the potential to be great spaces. We have no kids, but in the next 5-6 years or so, I can very easily see it being a child's bedroom.

In the meantime, I'm really itching to make it more of a modern space. The wood paneling is real wood and it would be a shame to get rid of it, so I'm okay with painting over it. The floors are also hardwood, but are scratched, have gaps between the boards, and are dented and stained from years of wear.

In the second bedroom (sorry for the low lighting) there is a horrible plastic (formica?) ledge that runs along the short end of the room under the window. It has drawers underneath for storage, but the top is so ugly I can't stand it.

What can I do to freshen this whole upstairs up? Turn it into a cute reading nook or a study. I have very limited funds and can take some time to do it slowly. If you have any thoughts, images, or design examples to share, I would be most grateful!

(As a very additional question--what is the current going rate in the Northeast to refinish hardwood floors? I know it's terrible, but I almost love the look of laminate floors over hardwood. Can refinishing them be done DIY or would that be a big undertaking/mistake for people with limited experience at homeownership?)