One at a time:
book storage: how about baskets? Bookshelves are certainly helpful, but you could keep the bulk of the books on a shelf in the closet or elsewhere and have a couple big, squarish (not round) baskets for books.
Canopy: can you hang that over the book area? Or make it the 'roof' for a 'house play' area?
Large spools: I'm not sure where to get those in your area. Perhaps calling your cable/power company? Or Freecycle? If you aren't getting anywhere with that, consider an old table on Freecycle or craigslist and then remove the legs and cut them short enough. (I did this to make the table for my preschool.)
No painting ideas, sorry. I hope some other moms can fill in the blanks...oh, a girlfriend of mine found some super cute-yet-sophisticated decals you can put on the wall. They were silhouettes of flowers. If you have them working at that area, you probably might not want something super bright and eye-popping.