Here's my plan for you.
You have an exit door right there in the room, that's great. Don't have to spend money on new emergency exits. I'll assume that's an outside wall then, and it's not entirely underground, so you can add a window to the wall on either side of the door for natural light and fresh air. Don't block the door with furniture.
Repurpose the laundry hookup to provide a small vanity table with a wash basin in the guest room. Nice touch! The black cleanout can be hidden by the same cabinet but make it accessible through a cupboard door. You won't have to access it often, hopefully never, but you don't want a blocked drain to require destroying your vanity.
Perhaps the room is too small for a bed and a vanity? Then the cold/hot/drain can probably be cut and capped on the opposite side of the wall, or perhaps inside it with minor drywall repair after, and the cleanout will be behind the bed.
Change the light fixture to something with less prison vibe.