A square room is not ideal, but a larger square room is more ideal than a smaller rectangle room. If removing the closet isn't a giant ordeal, I would think it to be a good idea.
For treatment, I typically recommend starting with both the front corners being treated floor to ceiling, either by superchunk/tritraps or soffit style traps and reflection points to be taken care of, either by diffusion or absorption. In a small room like yours, I typically recommend absorption at the reflection points instead of diffusion. With that said, diffusion
might help with certain speakers. Some speakers simply don't have a great soundstage at short distances, and diffusion can help develop that sooner. Lastly, the back of the room tends to have a lot of "boominess" for lack of a better word, so you'll usually see some suggestion for thicker traps on the rear wall which I agree with.
My goal is always to end with the right "sound" for the room that one envisions. It all starts with knowing what you want to achieve in the room and knowing what it's lacking at the moment. For a more indepth discussion on quantifying how we think rooms "sound" - check out our article on decay times here:
http://gikacoustics.com/understanding-decay-times/
