OK... if it's dark and you're planning on a darkish/earth tone wall color with the color blocks (on the wall and/or the rug)...
I'd play up the cozy vibe, maybe start flipping through books/magazines with images of studies or library spaces? The painters cloth we had on our yellow sofa (the sofa was a gift and crazy comfy... just this horrible yellow) cost around 30 dollars and was HUGE. It required a sort of free form origami approach but looked/felt ok and was easy to clean. If you don't want to go that route, stalk you fabric store or thrift store for afghans/throws/fleece blankets/quilts in your theme colors... then use this fabric to cover the back of the couch or drape it over the back and across the arms/seat cushion.
A neat trick I saw once was a large framed mirror "dressed" as a window... a curtain rod hung just below the ceiling and a drape swept back across the mirror. It added a lot of light and made the space feel more open.
I've also hung curtain rods around the top of the walls and then hung fabric shower curtains to cover the walls... it was a rental, I couldn't paint, real curtains cost triple the cost of a shower curtain, and the apt was drafty so I wanted to add insulation.

Anyway, you may be able to find a quilt or curtain/sheer in your colors, or make a fabric wall art hanging to bring in those colors without the cost of a new rug.
(I'll confess the curtains in my living room right now are actually "autumnal" table clothes from walmart... 72 inches, 8 dollars each, a sort of dusky gold with a leaf print in a lighter gold. and instead of curtain rods I grabbed sticks out of our woods... I used cup hooks to attach the branches to the wall, then drapped/twisted the table cloths around the wood, and finished off hanging a few autumnal things off smaller branches... little metal pumpkin shaped bells, a yellow glass ball, a red felt waldorf style gnome dd1 made, etc. So, um, I'm a bit unconventional when it comes to home decore... but I'm unconventional on a serious budget and I do get a lot of compliments so it can't look
that strange!

).
Hmmmm... given the lack of windows and the darkness I'd probably try to find a more flexible lamp or lamps. A floor lamp with attached reading light, or a "medusa" style light, or a swagged style that you could plug in and then adjust across the space with hooks. And a mirror (or mirrors) to bounce light and bring in a bit of a view?
And given the small space... could you slide the couch out from the wall a few inches and install a shelf at the height of the couch back? That would give people sitting on the couch a space for drinks/food/books/etc and remove the need for the end tables (making more space). You could also merchandise that space, perhaps with reading lights or whatnot. That would also create a space between the wall and the back of the couch that could be used to store DVDs, games, whatever. A DVD shelving tower would be about the right width, come to think of it!