Input requested: Kids' room bench/storage

I am embarking on a project (or perhaps I should say *we* are embarking on one :)). Recently I stumbled upon Ana-White.com, and oh. my. How did I miss this blog up till now? There is so much cool DIY furniture inspiration there!!! Anyway, I came upon this cute little cube bench that someone had made, and it got my creative juices flowing. I thought, "I could make that!" (Or to put it more precisely--"I could help to make that!!" You see, I know this really awesome carpenter . . . :)) Anyway, I thought about it a little more and realized that instead of making the actual bench, we already had the perfect "bench" that we've been using all along in the kids' room. It's actually an old wooden toy box, flipped on its side.

This toy box has a lot of history attached to it! My grampa built it probably 25+ years ago, for the nursery at the church I grew up in. When Jim and I were newly married, the church had just moved to a new building and they ended up getting rid of the toy box, which was passed on to us. We've used it for many thing over the years--hat and mitten storage, etc.--but most recently this is how it's looked. Besides storing stuff inside, we also put things on top of it for extra toy storage.

So, I have the bench . . . but obviously it's in need of a little TLC. Which is where you guys come in! I would like some input on how you think we should refinish it. I'm planning to sand it a bit to smooth everything up and get rid of the crayon marks (which were actually made by our kids, not some long-ago church nursery kids :)), but I am undecided whether we should then paint it or put a clear urethane on it. We could go with a white or cream paint (I think we have some of both on hand), or we might even have enough blue left from when we did the walls. I even thought about red, but I don't think that would probably look good with the fabric I'm planning to use. Plus, we would have to buy red paint, which would make the project less frugal. :) But maybe just natural wood color would be best, considering all the other wood in their room.

For the bench cushion, I am planning to cover it with the fabric on the left, and probably make some pillows for against the wall, out of the coordinating fabric on the right. My mom gave me both fabrics ages ago, when Sam was a baby, and I'm so excited to finally have the right project to use them on!!! Sam is excited too, because he thinks the cowboy in the scenes looks just like Cowboy Small. :)

For reference, here are some other pics of their room--so you can see the wall color and other colors that show up a lot--mostly primary.

And just because they're so cute--one last picture. :)

So . . . I'd love to hear your thoughts on how the bench should look! I can't guarantee which suggestions/opinions we'll end up going with, so don't feel bad if we don't use yours! . . . but I am just curious, as I'm honestly not sure what would look best in there! And I'll definitely post again when this project gets finished, so you can see how it turns out!