I'm using 500W speakers in a medium sized room. Even though it's filled with furniture, whenever I increase the volume it sounds worse. How can I get good quality sound by modifying my room?
If the problem is in acoustics, you need to reduce the sound reflection from the walls. So you need to put sound absorbing material on the walls, or acoustic diffusing material. You can buy specially made for this purpose products. As you are asking here maybe you want to know what you can make yourself.
The acoustic curtain material must be thick and highly porous. You must select the thickest, heaviest fabric your budget will allow. The pores act as thousands of tiny sound traps, capturing the energy. Find a fabric that could soak up and absorb water, or has a plush, velour surface. Another option would be to use multiple layers of a thinner material.
"They are an excellent alternative or complement to sound absorption because they do not remove sound energy, but can be used to effectively reduce distinct echoes and reflections while still leaving a live sounding space. Compared to a reflective surface, which will cause most of the energy to be reflected off at an angle equal to the angle of incidence, a diffusor will cause the sound energy to be radiated in many directions, hence leading to a more diffusive acoustic space." - from Wikipedia. You can make them with wooden panels. Search for a template for acoustic diffusers with the correct sizes.
A variation of diffuser can be if you have shelves with books on the walls, just pull some of them a bit at different level, not to be aligned.
Bass Traps are acoustic energy absorbers which are designed to damp low frequency sound energy, which are reducing LF resonances in rooms. They are usually placed in the corners of the room.
Acoustic treatment of rooms is a whole science which is difficult to be explained in a single answer here. You need to do deeper research about how to make diffusers, absorbers, traps ...