Hi Adrian, good see you having lots of fun there. You are quite correct that without treatment a huge amount of quality reproduction is lost. A mediocre system in a correctly set up room will provide more enjoyment than throwing mega-bucks at expensive components while eschewing the room acoustics.
Basically there are the 3 axes to take care of: front to back, side to side and top to bottom. It is desirable to absorb some of the energy and this absorption should be broad-band and needs to be done for each axis. The rug on the floor helps with top to bottom axis but being a narrow-band absorber it would be great if you could fabricate a frame that houses some rockwool and suspend it from the ceiling. The biggest room problem is the modal region, which are low frequencies that combine in and out of phase creating peaks and nulls or partial nulls. A full null is like a black hole where the sound cancels. If one thinks about this it is apparent then that a particular narrow range of frequencies are missing, gone and never to be heard. Unless something is done you will never hear parts of the music, parts that make up the foundation.
So it's time for bass traps but unfortunately the link you posted to some Amazon foam will not do anything for bass frequencies. They are just 8" (200mm) across and will disappoint. My traps are the recommended size and measure 900mm across and using Omnimic they do as intended, smooth out the lows and paradoxically although some bass is absorbed more and better bass is heard along with an improved mid and high range.
You mention overdoing the treatment resulting in a dead/dull room which is entirely possible, however you have the means to avoid this. Not sure if you are aware of this: there is a target to strive for which is dependent on the volume of your room, tables can be found online for the decay time which in your case might be somewhere around 300ms. With a plot of the decay presented by a waterfall or cumulative spectral decay on REW the decaytime can be examined and will indicate the problem areas. What is being attempted is to see how long it takes for the sound to decay by 60dB, known as T60 across the full spectrum. If you keep your treatment within the target area you have arrived and will experience sound that is full, informative and .. well just bloody marvelous. 2 or 3 subs will complete the sound and they need not be huge. In a small space 8" or even 6.5" subs will surprise you. Do not envisage thunderous bass but think of them as tuning devices and REW will help you position them.
By the way your images did not appear at first but I see them now. With the curtain you have there it is possible to improve on that, rendering them more broad-band in absorption (good) I recommend looking for 2 or better 3-rail curtain track. The quality thick fabric is hung on the outer rail and then any cheap fluffy fabric hung on the next 2 rails. By necessity these rails are spaced apart providing a wider more broad-band absorption. Also the 3 curtains can be tweaked whilst watching REW. Might like all 3 closed for movies but draw aside the window curtain for music. This 3 curtain trick is the least intrusive treatment and surprisingly effective.