It's not the space itself that is so wonderful (small but cozy, see the floorplan below) but the enormous south facing terrace that is larger than most New York apartments at 850 sf. I would fill this with trees and ivy with potted geraniums for low maintenance greenery.
The best room which takes advantage of the terrace views is the study, where I assume Dunne wrote his Vanity Fair column. Since I'm a movie buff, I would put a long deep couch under the windows facing built in bookshelves with a tv mounted on the front. The couch of course would double as a guest-bed for overnight guests. A low coffee table would hold bowls of popcorn and jelly beans during movie nights and dozens of potted orchids and plants on a console behind the sofa would enjoy the sunlight with 2 lamps for nighttime.The long living room, seen below, would house my collection of framed architectural watercolors, be painted a french gray and receive an antique oak herringbone wood floor. I would also need to source an antique white marble fireplace and some lalique crystal wall sconces to brighten the space. I would leave the french doors without any window treatment for a clean look and an antique rug would define the seating area. 2 comfortable reading chairs in a warm velvet, an antique sofa and mirrored coffee table would finish off this end of the room.The other side I would treat as a dining area with 60" round dining table, perhaps with parsons chairs for comfortable seating for long suppers with friends. The kitchen I would continue in the same french gray color (including painting the lower cabinets. A mirrored backsplash and countertops (ala Miles Redd) and painted wood shelving instead of cabinets to open up the space would be a great way to display my collection of china! I might even go with undercounter refrigerator drawers to create more counter and shelf space. That plate rack has GOT to GO as does the dated light fixture. I would continue the same wood flooring from the living room.The fussy roman blinds in the bedroom would be replaced with simple drapes in a gray linen to match the wall color: Continue the wood floor and a soft carpet would be nice underfoot near the bed. Would a mirrored 4 poster bed be too over the top, or perhaps overdone as many NY interior designers seem to favor this look? The dressing room currently has a beautiful chipendale mirror, seen through the doorway, that I would definitely want to keep!What would you do with the space? Would you prefer such a generous terrace or a larger apartment?