Begin by removing the awning. Do you need those bars on the windows? Plant something dense and tall between your house and the one to the left (in the pic). Patio floor appears to be in good condition-will you keep that and leave it as-is? A pergola that replaces the current awning would be nice, or a seating area under a large umbrella would work too. A bench built around the perimeter would add much-needed seating and separate the space from the rest of the backyard. You have lots of options.

^ Good suggestions, @stuckinlodiagain. I prefer the umbrella seating myself this becomes more mobile and not so stuck to the side of the house. Some smaller trees would be a nice outline separating your house from the one next door.

There are many free standing pergolas that do not have to be attached to the house. A pergola such as this would go along way in adding some style and value to your house over umbrellas.

Not sure of how much you want to spend, but my first priority would be to remove the awning, add a pergola and privacy to both sides - see 2nd picture. Or no pergola and a large portable umbrella would work and still consider some privacy lattice etc. Add an outdoor carpet and some lanterns and even a propane fire pit. If you have to keep the awning, paint it and the supports an interesting color. You also have to make the back wall more interesting (1st pic) take down the bars if you can. If not, place some bamboo blinds over them when outside and role up for more light inside when you are in the house.

Your space has a lot of potential and doesn't necessarily require a major expense to improve. I think you should approach it as several rooms. The smaller covered area could be used as an outdoor kitchen with the cooking surfaces abutting the back wall. I agree with decoenthusiaste that you should get outdoor panels for each of the awning supports with tiebacks to frame the kitchen area. Divide the covered and uncovered area with eating bars or islands on each side of the center supports. It looks like you could fits three stools on each side. Divide the uncovered patio area with a living room on one side and a large dining room on the other side. You can be creative and make your own large table surrounded by a collection of chairs that don't necessarily have to match as long as you paint them all the same color. This could be a very interesting eclectic space. Good luck.

Here's are examples of outdoor kitchens with and without an island:




And outdoor curtains with living and dining areas across from each other:

https://www.houzz.com/photos/2009-southern-accents-showhome-traditional-porch-dallas-phvw-vp~505338

By the way the table you have is nice. I would just find some yard sale chairs in need of TLC that could be painted or dressed up with matching cushions for a nice decorative punch of color.

Outdoor shutters can be as wide as 5ft per panel and give you the ability to control light, privacy and security. They are made for the outdoors so weather is never a problem....powder coated aluminum and miami-dade wind rated so you don't have to worry about storms. The attached pic shows them surrounding an outdoor kitchen.

just a thought