Would be fun kid hideout space! Awesome dog kennel under the stairs design idea. If you want an indoor dog house, utilizing the space under the stairs for a cozy, attractive and practical space for dogs is a good idea! I love this design.
Crate shoe storage We could probably do the wall beside sky's closet like this to help her keep her shoes up off the ground and organized. Interesting way to organize shoes. It would look good if we did the pallet wall accent in her room thoughts?
Giaguara describes, and I agree: Cat room. This would be awesome. To be then connected to a catio, and a small snuggly corner with bookshelves where the humans and cats could have some proper snuggly time.