There a lot of chances for both solutions, but it's very important to know how the distribution will be. Could you show us a layout?

HI -- That is the perfect place to have a built in console cabinet with storage for family and kids stuff . There is never enough storage when you have small children. It could be double sided either like two cabinets back to back or just one with doors on each side . make it the width of that dining room area and the stairs to be the width of the line of the hallway. The end of the cabinet should line to that wall that juts out across the room . The cabinet could have a marble top or glass or the wood it's made of . Walnut would look beautiful -- but this all depends on your budget and your other furniture , but keep the style very simple and clean lines - modern . I think that would suit the house style. Just having a railing across is just wasting the opportunity of good storage.

Here you can see the entire layout. The kitchen will be a little different fron this picture, but there will be an island.

HI -- Now that I see the floor plan , seems to me that area should be the dining room and the dining area should be the kitchen . it would be better with the dining being part of the living room . With the kitchen moved to the dining room on the plan then the kitchen is more hidden from the living rooms view . Where is your entrance ? or is this a raised living plan ?

I have thought about cabinets/bookshelves but haven't really found a solution that doesnt feel like it will close up the room too much. I worry also a little that stairs in the entire length of the room will be visually boring/less interestibg, and doesn't allow to many interesting seating-options.

The livingroom (sofa area) is lower than the kitchen and dining area:

In this case I would do the steps along the whole width, for two reasons:
-You won't use the space without steps to put a bar or any other kind of furniture
-You like clean lines, and this way it will be continuous
-Your children will be safe
If you want it to look different you could continue one or two steps around the back wall (just for a couple of meters) and decorate it with some sculpture or plant.

Lefty47: How high would you build the cabinet? The height of the kitchen island?

Yolanda: Didn't quite understand what you meant reagarding back wall/continuing. Could you explain more?

The whole length of room. Would be so much better.

Some times a few steps may be enhanced in many ways, but in this case you are lucky, you don't need to, because you have a lot of space to play with. And for me, distribution is right, the table placed next to an enormous window to the patio is perfect.
And nobody believes me when I say that is much difficult to distribute and decorate big spaces than small ones.....

With "continuing on back wall" I mean to go on with the steps on the wall opposite to the big windows, just to "play" with these architecture elements.

Thank you so much for helping me with your ideas and perspectives! I have a clearer view of my options. I am now leaning towards building the stairs in the entire length. I will still have the opportunity to build cabinets or bookshelves later. But I now think we should start with the most open solution, and maybe play with/repeat the stair shape elsewhere in the room. Possibly connected to a fireplace? :)

Have you thought about your view while sitting in the living room? you will be looking right across your kitchen floor. I would consider one set of steps with either a nice contemporary glass or metal rail (just search railings in the kitchen section) or some type of built in book shelf as others have suggested.

HI -- I would make the height of the cabinet 29 inches high (table height ) on the kitchen side - so it's like a buffet . I would have the cabinet so the living room side has the cabinet over hang the edge . So there is space under on the living room side . Like a big long box hanging off the edge .

HI -- Now that your talking about having the full length stairs - even bigger reason to switch the kitchen and dining areas . When sitting in the living room , now you will be looking across the kitchen floor , not always a good view at the best of times .