When something "goes well in" a room, it means that it looks good in that room. The colors and style match the other objects and the overall look of the room.

"Go well" can also be used in the phrase "go well with". This is used for asking about whether two items, such as two pieces of clothing, look good together:

That jacket doesn't really go well with those shoes, dear.

Even more casually, people sometime use "go with" in the same way:

That jacket doesn't really go with those shoes.