First, our glimpse through the window helps establish the remote and romantic nature of the place. This is not an urban world, but rather the fairy tale world of a beautiful princess in her tower. A bit later, a stranger will scramble up that "tower," and Raina will explicitly liken her position to that of an aristocrat in a castle. When Shaw describes Raina on her balcony looking out on the snowy Balkans, he is preparing us for that image.
Second, the description of the interior is meant to convey that the inhabitants live far from the center of the contemporary European cultural sphere. This, too, relates to the theme of romanticism.
In an interview Shaw said he was "absolutely ignorant of history and geography" and selected Bulgaria as the setting of this play because it was convenient. He wanted a contemporary setting where there had been a recent war, and Bulgaria fit the bill. But he also seems interested in playing up the idea that his play is set among people who are exotic, and throwbacks to an earlier, more romantic way of life.
For instance, the painted wooden shrine would have reminded Shaw's audience that the Bulgarians were part of the Eastern Orthodox Church, with religious traditions very different from their own. The "rich" part of the décor -- like the Turkish ottoman -- reflects the exoticism of the East.
And the half of the room that reflects more Western tastes is merely "cheap Viennese," a decidedly unsuccessful effort to keep up with European trends. The dressing table is "a common pine table, covered with a cloth of many colors." The only thing about it that is sophisticated is the "expensive toilet mirror on it." The paper on the walls is occidental [Western], but "paltry"-- not the latest chic design. The message is that these people are hicks -- capable of being "gorgeous" when they stay true to their colorful, ethnic roots -- but rustic and behind the times.
Years after the play was written, Bulgarians in Britain would protest at Shaw's depiction of Bulgarians, and you don't have to know much about this controversy to recognize the patronizing way in which Bulgarian life is described. The very end of the stage notes at the beginning of Act I gets the theme across in a nutshell. Catherine (who is, in essence, the queen of this residence):
"…might be a very splendid specimen of the wife of a mountain farmer, but is determined to be a Viennese lady, and to that end wears a fashionable tea gown on all occasions."
This speaks to another theme that is foreshadowed in the room's description -- the notion that the characters are naïve and pretentious. They are pretending to be something they really aren't -- making them the opposite of Bluntschli.
Finally, Raina's pile of novels give us a hint about the romantic literature that influences her, and of course the conspicuous portrait of Sergius helps establish the theme alluded to in the title of the play -- "Arms and the Man." Those words are taken from the Aeneid, an ancient poem that recounts the deeds of great heroes, and glorifies war.
In this play, Shaw argues that such heroism and glory is a fairy tale or fantasy. Shaw prepares us to examine this theme by calling our attention to the
"large photograph of an extremely handsome officer whose lofty bearing and magnetic glance can be felt even from the portrait."
Artenie, Christina. Bernard Shaw's Bulgaria in Arms and the Man. Paper written by a lecturer at the Universidad EAN, Bogotá. See link below.