One word: Storage

IMO You need a 4X4 white expedit with lots of bins on that gray wall. Personally I wouldn't worry about painting the cabinet, I can't really tell but it seems fine with the floors and that table. If you want art above you could also do two 2X4s lying on their sides with a big pop canvas over.

10 feet wide seems like enough room to pull that table off the wall, turn it, and float in the room.

@ChesterandTrudy, I must have grey on the brain. Corrected!

A dining banquette with storage integrated into the base.

But, if you are keeping the cabinet, bike storage, wall color, table, chairs, and drums, I'm not sure I'd call that a "blank canvas."

Something white that pops against against that beautiful gray. Expedit or floating shelves would look great but still give you flexibility with color options in the room.

I think you should look at a center piece above the table on the wall, so your eye goes there first. I like the yellow chairs, so I would include a pop of yellow in that poster, or painting, or frame. (if its a yellow frame then you could display the kids art in it) Then I would zone off the rest of the wall. Do you need hanging shelves, would it look to messy? I see a painting area and a drum set. You could zone off the rest of the wall and hang gray or neutral storage for the arts and craft stuff. Just have a home for all the crafts, so at the end of the day the table is clear. If you like the idea of chalkboard there are also chalkboard wall decals that come in fun shapes.
http://www.allmodern.com/Wallies-House-and-Trees-Chalkboard-Vinyl-Peel-and-Stick-Mural-16011-WXS1127.html?refid=GPA81-WXS1127&gclid=COHOkr-M6a4CFQdN4AodTyWWgQ
Good luck!

I like the idea of it being an art space, but more fitting for adults who will eat there alongside the kids. Frame some inexpensive art prints and the work your kids do. I'm thinking light teak frames would lighten up the grey and be very bold. Maybe organize them in a straight row across to break up the height of the grey wall.

Wow that room is so cute. Okay so the expedit shelving is the best idea but a second option would be Marimekko fabric mounted on a frame and hung as a wall hanging.

I'm not going to address all of your questions, but the one thing I keep thinking is - get 4 of those plastic box frames that have a removable cardboard insert and have a rotating art exhibit on the wall of the children's work. You could paint the edges of the plastic a fun color - like more yellow or a bright orange - or even just wrap them with colored tape. Get the frames large enough to be able to put a full sheet of paper from a sketch pad.

http://www.amazon.com/MCS-Frames-11824-5-Acrylic-Frame/dp/B0016ZOX56/ref=sr_1_5?ie=UTF8&qid=1331824790&sr=8-5

It's amazing what a simple assortment simple gallery frames can do to a blank wall. It's not the most original treatment but gets you maximum impact for minimum spend which is obv important for a rental and something I recently did myself.

I bought a ton of inexpensive Ribba Ikea frames, then filled them with some gorgeous photographic and art prints from a company that specialises in producing art custom designed to fit any ikea frame:

www.artforikeaframes.com

It's really cheap and value for money and definitely the cheapest way to get beautiful, high quality framed art onto your walls.

Are those "bikes" for your tykes? I can't see well in the photo. But if they are, since you also have a drum set, the first thing to do is get that floor carpeted and think of noise abatement or you are going to be soooo unpopular with your neighbors...

Chalkboard contact paper on the huge cabinet

I like the ideas of a central focal point, a gallery of frames, and/or a Marimekko print which really fits the style of the apartment.

We definitely are in need of storage. I love the idea of an Expedit or something white or metal that will pop against the grey wall. I'm trying to find something that is design-oriented, functional, and affordable, that preferably is not from Ikea. The reason being that in the adjacent room we have a very large Ikea Besta wall unit, a Besta desk, and Ikea desk chair. I'm worried that it will turn into an Ikea showroom, and we'd like for our space to have more individual personality than that. Still, it's an easy, and good looking fix.

@Crich, the bikes are for my tykes, but we're trying not to ride them in the house. We luckily don't have a downstairs neighbor, and we've reached out to the upstairs neighbors about the drums. They're very sweet about it and they won't be awakened at odd hours from us. Carpet is definitely the last thing on the list for this room. It just wouldn't be practical with food and art.

Paint a life size bicycle frame but leave out the wheels, instead hang actual bicycle wheels where they should be for a very cool 3D mural.

Paint a stencil on the wall to give it some interest (in a lighter color: light grey? white?)..you can type in "wall stencil" in pinterest for lots of ideas.

and then install some storage for functionality, you could even DIY some shelves and/or wall cubbies to make it less IKEA-esque and cheaper.

Good Luck!!!!

Putting some books on the wall and hanging the bikes on them at a slant with some colored frames of the artwork would keep the room fun and be a functional use of the wall space.

A tall yellow metal shelf like the one in the link below would be cool: http://www.roomandboard.com/rnb/product/detail.do?productGroup=7576&catalog=room&category=rm_kids&subcategory=kid_bookcase_shelves

putting some hooks on the wall for the bikes, not books haha

@Liz30 I love that yellow shelf! Thanks.