Shy not build a pergola attached to the rafter tails on your garage/storage to create shade for the play area and give another demarcation indication? You could grow vines on in or drap outdoor fabric to make it even more shady.

I like the idea of the pergola. Lowes has one with a cover in aluminum which should hold up very nicely. I love aluminum for outdoor use - it is lightweight and does not rust so will last a long time. I also have a photograph of a cover over a Pergola at a sidewalk cafe that my husband really liked. It was taken in Palermo Sicily. You can go to my Etsy shop for sure and see the photograph, nancyhehmann and I have uploaded it here. The great thing about that draping is that you could purchase fabric (canvas or sunbrella - for definite color holding properties) and you really would not have to sew it. Just cut it and for the edges you could fold it and glue it if you do not know how to sew. It could be replaced easily too. They also used planters to divide up the space with green plants. I would use little shrubs so you don't have to keep replanting. The plants could give ambiance to your entertaining area. You could make them or purchase them. You can find planters online if you don't see anything locally. To hide the garbage cans there is fencing available in sections (not wood) that you could hinge together and place around the cans. You can look at Lowes or Home Depot or you could use wood if it matches whatever is around your yard now.

beautiful pictures! i love the idea. it's a bit out of our price range though. any ideas on how to do it with a smaller budget?

You're overwhelmed. Don't bother yourself with the kids toys or play area. Don't bother yourself with the Hubby's toys or play area (BBQs / surf boards). Don't bother yourself with the garbage cans. It's all just too much! Your area that you will be in charge of is the covered area with the table and chairs, cement, plants / shrubs. Share with family your plans for your area. When you find time, clean, sweep, hose the cement, table & chairs. Keep this area, & only this area, clean and beautiful. You can plan a color scheme and coordinate an outdoor rug or tablecloth or lights or whatever else you like for this space. I cannot see the shrub area that is in your space. I'd probably prune the shrubs a little and plant a ground cover between the shrubs for easy maintenance. Ask plant nursery what low growing ground cover is for shade. Maybe Vinca Minor (I live in SoCal, too, but I have sun almost no shade).
http://landscaping.about.com/od/groundcovervines1/p/vinca_minor.htm

another idea is to plant mint as a ground cover between the shrubs. Mint spreads nicely (sometimes invasive, though) and is tasty in drinks & salads and kids might like it. Other herbs sometimes grow in shade, too. You can experiment. You'll have a great deal of fun and enjoyment with your area, I think. Remember, though...do not even think about the other areas at all!