Attic master bedroom wainscotting

I'd paint it to match the light color in the wallpaper and have it wrap around all the walls in the room.  However, it's your house, so it's your rules.  Good luck;  it looks very nice so far.

I think wainscotting and paneling can be painted different colors depending on the age of the home. I've seen very colorful built ins in pictures of RL colonial era homes.

That's more like a knee-wall. Wainscot would be taller (about 1/3 the height of the room, or more). You could wallpaper the knee wall, although that might be tough to do now that you've already wallpapered the ceiling.

If you make it into a taller wainscot then I would continue it around the other walls too. I wouldn't use the stark white paint. Stained wood or something closer to the wallpaper color would look better.

Another option is to build in storage. Here's what I did in my Victorianna:

My parents built a master bedroom into their attic and they have storage like this under the sloped roof. That's what gave me the idea.