This is the perfect place to put a pull out bed. I always look at those beds and think they're impractical because it's too hard to leave all of the open floor space needed for one but I'd happily do it for this library/reading space
LOFT SPACE AS AN ART STUDIO; Loft and library combined: Rustic and industrial make a happy marriage in designer Jill Sharp Brinson's Atlanta house. Her 1936 cottage's old barn beams to define the loft and steel shelves for books. From House Beautiful
Home libraries - this one is amazing but there are others that are more achievable.
At the back of the dining room area you could put a wall-to-wall bookcase filled with books. If you don't have that many books you can have a display bookcase where you place nick backs, a few books, some magazine, sculptures etc.