How to decorate an area in my home?

We have moved into a new house and the upstairs has hardwood floors and a beautiful bay window with an empty space in front of it.

I'd create a separate reading area in that space, and build in a window seat. Bay windows are a great place to put window seats.

If you have the seat created for you, I'd put shelves below to store books or knick-knacks. I'd put a large, puffy cushion on the seat and several throw pillows to make it comfy for reading. If you have the space along the sides, get a couple of built ins for extra storage.

On your floor, add a space defining area rug. Area rugs are a must have for hardwood floors, as they add extra comfort and separate your areas. A contemporary area rug  is a great addition to any room. 

What colors can I use that would give color to my grayish/bluish couch? HELP!?

I think out of all of those colors, I'd choose brown and blue accents. Dark brown goes with black, white, and red easily, and it can bring out the blue in a greyish/blue couch. Dark brown and blue is a great combo.

Try to alternate between dark brown and blue throw pillows. Find something with a pattern so they color pops when you look at it. Add mirrors here and there to reflect the color. Throw pillows should be in a similar color/pattern. You can find so much out there right now in brown or blue.

On your windows, add sheer curtains. They will allow light in and if you follow the color theme they will bring a uniformity to your room.

On your rug, add a big area rug with your colors in it. An area rug like this Blue and Beige contemporary would draw your eye away from the couch and onto the floor, livening up the room.

Other items I'd add to your room: patterned picture frames or word art (ie: friends, family, love, etc.) Lamps add light and ambiance, and if you have a chocolate lamp shade it adds color to your room.

If you find that you still aren't happy with the couch, you can cover it up with a slip cover. They are fairly inexpensive now, and you can find them at Ikea, Ross, TJ Maxx, and other stores. 

What paint colors go with dark brown?

Brown is still a very hot color, and I've found that its being used on walls, furniture and carpet.

If you are looking to complement dark brown furniture, you can either paint metallic blue, taupe, a mix of taupe and dark brown (alternating walls), or straight taupe and then a feature wall of orange or deep fall red. If you add a bunch of throw pillows to the couch in your contrasting color (blue, or orange/red) and other accessories with a touch of color, your feature wall will really pop.

I've found you can choose almost any straight paint color, but its the throw pillows, area rugs like this dark brown area rug and knick knacks that will really bring your room to life.