Design: the Battle of Necessity Versus Aesthetics

Reality is not glossy and perfect like in design magazines. Reality is messy, awkward, and not always beautiful. Those gorgeous photos of baby rooms, pristine and decorated to the nines- without an item out of place? Not real.
All the truth is most likely stashed out of the picture frame, heaped in piles or shoved in closets. Such is my reality at this point. But I shall spare you that picture.

 Before my (almost) 5 month old was born, I day dreamed about setting up her nursery.

 I'd be creative, witty, and inventive. would feature her room in their kids tour.

People would swoon.

 Then reality hit, (she was born) and her room remains a work in progress.

 image source

Fretting over the rug, I have yet to purchase one that really holds everything together. We've been through 2 already: Anthropologie's Mantadia rug. Gorgeous, but thin and delicate, and much more conducive to being hung as a tapestry.
 image source
Then we tried Company C's Porcelain round rug: also gorgeous, but the brown was too much and the rug ended up being too small for the space.

So, with rugs on hold, (unless you've got a suggestion for us?) we've entered into the territory of window treatments. 'Out the window' goes my idea of flowing sheers, or soft delicate cotton prints. Nope, we're heading straight for budget-friendly, utilitarian blackout curtains.
 image source
Opting for the beige blackouts was nixed as my friend has a pair, and they just don't do the job. Purple was unavailable, or I would have gone with those. Pink was too, well, pink. Fuchsia would have been great, but alas, no fuchsia. The next, least-offensive color was navy. I cringed with resignation. But if they succeed in keeping my wee one down for lengthy naps during the day, this means I can work on professional tasks, (like this blog!), and that's the ultimate goal.

So, now that I have hideously unattractive navy blackout curtains, I figured, might as well dress them up. Here are my ideas:
Hang ribbons from the top in shades of turquoise and blue. Glue/sew pom poms/pom pom fringe or other doodads to the curtains, perhaps circles of turquoise felt. Maybe hang a sheer overlay of a lighter fabric across the top of the navy, something lacy, iron on appliques of flowers, paint a pattern on the fabric (not sure how it will adhere...) But reality has to rear it's ugly head once more, reminding me that I can't spend a fortune just to put lipstick on a pig.
With a certain someone in the picture now, there is little time for craftiness.

So, how do you view design out of necessity? Are compromises "acceptable"? Are budgetary restrictions a cop out, or a challenge to get creative? What about usage needs- an impediment, or just another challenge to meet?