I feel your pain. I hate peg boards. I don't want to see stuff hanging. I store my threads in thread boxes and other sterlite boxes stored out of sight. I use under bed rolling storage for batting . I started a thread a month or so ago called "purging, Purging".
I bagged up excess, unloved fabric, and donated it to a charity group. I purged 3 of the now empty 3-drawer rolling plastics. Gave them my DH for his workshop. I took down a folding plastic folding table and replaced it with an extra bookcase and I put Closet Maid fabric boxes on the bookcase to store-hide my stash, etc. And I gained 12" of floor space in doing so. I can breathe!
visual clutter is a de-motivator for me. I need to store things out of sight.
If I a feel overwhelmed with stuff, i, too, cannot get into sewing, etc. I am a "piler" . You are not alone! Keep on purging. And re-orgainzing. Always a work in progress for me too. I have posted many of my sewing room metamorphoses over the years.
I curtain off my table to hide the stuff underneath it. It calms me.
How big is that room? It looks huge! I would live to come help you ! You have great space!
sandy