A bunch of people I know put silk flowers, ribbons, ornaments, etc. on their dulcimers according to the season. I don't because I keep a pick bag hanging on the end (it looks like a Texas flag--I guess that could be a decoration). Got a pick bag on the guitar, too. I don't decorate it, although I do have a sentimental pick--too thin to use effectively but it's the one I used when I started learning and didn't know any better.

I painted my soft nylon guitar and dulcimer cases with the plastic-type T-shirt paint you get at hobby shops. I draw the design in white paint first and then do color over it, otherwise the color seeps into the nylon too much and won't show up (my guitar case is black). Works really well--flexible, brightly-colored, and waterproof.