When you get to the treasure room, how does it work?

You can't do anything with it, as far as decorating. In a recent update, they added a few rooms, but once you're done with those you end up back in the Treasure Room. (And you don't have decor choices in those, you just spend paintbrushes and the game fills in the item.) It has its own competition that starts every 6 or 7 days, based on winning levels and collecting stars (like the regular standings.) That's it. You can't choose to have a different finished room in the background, either. So if they add new rooms again, and you don't want to stare at the treasure pile, just don't finish them. You'll be giving up the treasure competition but it's coins, not boosters or whatever.

The room is the background of the Home Screen. If you click the paintbrush, you can use the credits to decorate the room with flooring, window treatments, rugs, paint, etc…again, this is just for making your Home Screen cute and custom. It’s not for use during the game itself.