I like the idea of partially separating spaces with artfully draped curtains. BTW, this pink peacock fabric is available at JoAnn's Fabrics & crafts//Pinning for the pink peacock fabric. Totally using this in my doorways.
Hanging lights on branches. Go natural with a fat branch and hang a combination of ornaments and candles attached with wire. Use twine or strong fishing wire to suspend the branch from above. You might want to try hangers so as not to damage your ceiling.