Why bother with a retaining wall? You might want to take the stumps out because you could get sucker growth worse then what you cut down. Get some stones/boulders and bury them into the soil and plant perennials and some woody plants. Don't know what your sun exposure is but if cutting down some of the trees on top to let some sun in all the better.

We get afternoon sun.

We really want to clear some more area in the back. It feels so closed in - so that is why either we are considering excavating the hill and putting in a retaining wall - or doing the tiered yard.

It looks like you have identified what you want-to feel less closed in. You can remove the "unwanted" trees (and stumps)in the area above the slope (you may want to keep a few specimens). I agree with bullthistle, the slope does not appear to be drastic enough to require a retaining wall, plus that would add to the feeling of enclosure. Bury boulders, make a nice stepped path to the cleared area. If you plan to have a lawn in the cleared area, make sure to include access for a lawnmower.
It looks like you have a great site to modify and keep it natural and relaxing looking.

It's odd, but there are some things for which the internet just doesn't match books. I suspect a few books or magazines on landscaping or on wall-building will net you more information than the net. Maybe it's that it is tough to search for pictures, since they don't often have enough words associated with them.

Anyway, I think the points already made are good ones. Perhaps you also need to think about wall materials; after all you will be looking at that wall very much. Is there any material you would want to be faced with all the time, or would other options - sloped lawn? rock garden on the slope? - be more pleasing to you? There is a thread around here somewhere about gardening on a hill - a search might find it. That would help you think about what the hill could look like and what process and maintenance would be involved.

KarinL

Try taking a photo with your back to your house wall, and looking out to the hill and woods.

Does the deck itself contribute in part to the enclosure--do you need the back rail along the whole length, or could you blend a long step into the hillside? Or maybe instead, the rail helps lift your eye up and is less confining--I don't know.

In general I can't tell how much open feeling you'll get by clearing the top of the hill as opposed to pushing back the lower part of the slope so your "flat" area extends a bit farther from the deck; and if there's any way you can get that same feeling without actually excavating a lot.

stevega - the top of the hill is over 5ft from the flat area - I am 5 ft and it is taller than me when I stand on the flat areas. I guess the retaining wall would be more so if we decided to excavate the hill.

Frankie - I will try an take that picture tomorrow - I do think that the railing is holding us in - but we don;t want to redo the deck until we have a better idea if we are clearning the hill or not.

I want to be able to walk out the sliding glass door and right onto the deck and I was thinking more about something that was more of a platform with some wide step areas or steps spanning the entire platform. Maybe curving around when we first go out the door and opening more to grass and have the deck more to the left. (does that make sense?)

I agree that I am not sure what will make it more open -but I just want to feel like I am utilizing more areas of the yard. My husband was thinking about one of the boulder walls - if we did something like that.

I wonder if clearing the top area and taking out the stumps will lower it a lot and then we can have a slight grassy hill up to cleared area. Have it be much more slight.

Thanks for all your ideas and comments.
Ruth

A path sounds like a good idea. Where would it lead? What would you like to see at the end of a path?
My friend in Sweden has a cliff in his backyard - big solid mass of granite going higher than his roof. On top of the cliff, the previous owner had built a kids' play house - now used as a guest bedroom (the guests have to climb a ladder to reach it). Kind of a fun arrangement.

Keep in mind where the afternoon sun is if you clear a lot of trees out. It might make the heat there unbearable.