OP,
First, do you like the blue? Or do you want to start from scratch?
A couple of ideas regardless of your paint choice, you can break up horizontal wall space using frames, like the way framing is used to break up tall foyers, e.g.,:
Alternatively, you can use furniture to create separate spaces, e.g.,:
You definitely need to anchor anything like a bookcase so it's not a tipping hazard.
Paint color isn't the only thing you need to rely on:
http://www.apartmenttherapy.com/dividing-space-without-building-walls-clever-furniture-placement-and-more-206434