Don't confuse treatments with soundproofing. In room treatments will not block sound, but rather only make the room sound better. Typical treatments include treating the first reflection points and bass traps. Typical sound proofing includes decoupling, dampening and mass.
The reality of another layer of drywall is hitting me, because the baseboard/door/window trim would have to be redone. On the other hand, if I do add a new layer, I'd have the luxury of wiring some wall sconces. I hadn't considered this an option before, but if I'm starting again from scratch (already having painted all walls/ceiling + installing the screen), it would be an option, albeit more expensive.
New question: With a new layer of drywall, how are the existing elecrtical outlets incorporated?
The major factor in this is cost. This isn't a single family detached home, but I did buy the place specifically for this room. If I can have a layer of green glue and drywall installed for a good price, I'd have to seriously consider it.
You haven't told us what type of construction you unit is, how are the common walls constructed and isolated, which wall in your diagram is common, whether you have neighbors above or below.
Also where you live and type of construction is a big factor in cost. Is this a NY high rise, row townhouse, or Florida garden style unit.
A picture would also help us understand your existing window molding construction and what might be required to add another layer of DW.
Also before spending a dime you should give your set up a test by playing an intense action movie sequence in cooperation with your neighbor allowing you to listen first hand at what sound is making it into their unit.
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