In my child care facility I set up a hard side child's pool in a corner. I put a ton of throw pillows in it and added a bunch of snuggly blankets too. The lighting was good and the kids loved it.
I put the books the kids could have access to in some 12"X12" cubes, like milk comes in, around the sides of the pool and the kids could dig in them and find their favorite books.
In another classroom we had the corner set up under a big corner shelf. They could pull a curtain across and lay behind it on a mat.
In the school kids classroom we had shallow shelves along the walls around the hard side pool, it was the next to smallest one, and they would crawl in and snuggle up with pillows and blankets then read for hours.
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Here are some links to sort of what I'm talking about.
Hard side kids pool from Walmart.
Almost half way down this gardening site they're planting Wasabi in one. They can be used for above ground gardening and so much more!
http://mountaingardensherbs.com/index.php/2012-year-in-re...
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This site shows sort of what my shelves about the reading nook looked like. These are nicer...mine had plastic fronts and sections. Like you see in some doc's offices.
http://lovelylittlebookworms.blogspot.com/2012/05/creatin...
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The second one down, with the blown up pool, is a lot like the one I had in my own classroom but I'd never put a blow up pool in a child care classroom. They'd have a ton of holes in them each day.
http://www.theclassroomcreative.com/2013/09/classroom-rea...