To help make the area feel larger and more up-to-date - and keep the cost down - we created an alcove to hold a hall tree. This picture shows the progress so far: the alcove is done (needs painting) and the hall tree parts are fabricated (no trim, stain or sealer yet)...
I made the hall tree out of "rustic" cherry (some knots and minor defect), which cost $4 / b.f., which was about 1/2 the cost of regular cherry. It also gave me the the right look for our house, which is not formal.
Here is a picture of the floor plan changes we made. We "stole" about 8 square feet from my office (read bedroom for my son in college) where the closet used to be, and moved it down as shown.
I am going to add a set of built-in bookshelves to the office that back up to the alcove (3 ft wide x 7 ft high). I think the room will feel almost a spacious with these installed, instead of just a plane wall. Also, the hall tree does not need to be any deeper than 20" on the entry side to get the effect of more space.
A few year ago, I read a remodeling / design article that suggested if possible you should select a non-vital room to "steal" space from for improvements. This is what we decided to do with the office. I started out at a 12' x 10' 6" room plus a six-foot closet. We gave part of the room to the guest bath, and now a bit to the entry. This has left us with a 12' x 8' 6" footprint, plus a 4' closet, which is fine for an office / guest room in the long run.
Hopefully, this weekend I can get the shelves for shoes and face trim done, and have everything stained and sealed.