For one thing, you find yourself only having items in your home that are practical. If I don't use it, I get rid of it. Which leaves much less space for pretty, decorative things. In my living room, I have one shelf and a tiny mantel where I can put things. I find myself always looking for ways to make rooms feel bigger.
One trick that I use is creating a color palette for the room that has very little contrast. When you have strong contrasts in a room, your eye stops at that point. If you have a lot of black and white, or brown and light tan, you will notice that the places where those colors meet is the place where your eye rests. If you have lots of contrasting points in a small room, your eye will stop at many different points. But if you have only one or two points of strong contrast in a room, then your eye tends to glide over most of the room, making it seem bigger.
I love to use pale gray walls with white furniture and an accent of light blue. All those hues are very light, and do not create much contrast. It's also a good idea to use lighter colors in smaller spaces. For some reason, lighter colors seem further away. If you have a dark red wall, the wall will feel closer than if you paint it pale yellow.
I hope that gets you off to a good start when you are decorating your small space. I'm hoping to have several other small space posts for you, since I seem to always be dealing with it.