If you want just pretty sitting place, I do see MCM as a nice style for your space...

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I can see your challenge due to the lack of a large wall space and multiple doors and stair railing. Since it sounds like the only rooms off this space are for guests I would not concentrate on it being a "play area" . Unless I misread that and there are childrens rooms up here? In which case it could be a study den and homework area. I will stick to your description of it being connected to a second master and bath only. I would create a seating space in the center as there is no focal wall point.

I wasn't aware your daughter is staying/using up here. In that case if you want a clear path, something like this would work. Leave the middle empty to run , walk etc. A rug like a runner would also work from the stairs to the back wall. Of course you can replace the art with a TV if you want it to be an entertainment center. The picture doesn't show, but try to put the feet of whatever furniture or bean bags on the rug. This is to just show layout! Although you can also use the right side too, basically creating a perimeter around the room and leave the middle free for sleepovers, family games etc.

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