It would make the space much more open. :)

This space would be great opened up. If your budget allows to replace the floors it would really unify the spaces and make a huge impact on the home. Go for it!

Open Kitchen / Dinning room combos are really in right now anything you can do to give the appearance that your in a wide open space is extremely desirable. Providing there is no support beam 4x4 wood post etc holding up structural support to the ceiling the job should be very simple. The electrical can either be thrown into a Junction box in the ceiling if you plan on using it for something later or can be a direct termination at the service panel. Then you could replicate the width of drywall space that you see in the left side of the photo from cabinet to door casing which looks to be about a foot. Then replicate that width on the right side and add that same or similar wood trim and make a picture frame opening. This will realistically be the most cost effective way to open up the space and keep everything the same. Additionally where you pull out your plate line at the base of the wall will be a 2x4 with 5/8" drywall on both sides giving you 4 3/4" inches of gap between both floors. This could easily be filled with a custom threshold to connect the two floors without having to redo any portion of the floor. The picture shown below gives some idea of what the threshold will look like. Best of luck to you!