How can I add a closet to an existing room?
So based on advice from ratchetfreak in comments I took his advice and went with the 'corridor' effect on the 37" wall (pic below). As the room has two doors it gave me an interesting perspective on what the 'walking into the room' vibe was. For door #1 (the bottom door in pic) I felt like the closet made the room feel smaller on entrance. For door #2 (left wall) I was really surprised that walking into the room didn't feel like the closet was overbearing. 

So my end analysis is that a closet jutting into the room across from a doorway is fine. Also, that a corridor effect makes a room feel smaller on entrance. I prefer option one, although we ended up going with option two because it really was the only place the closet would fit.