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Hi. We are from PA, but I can still give you some thoughts. We love creating outdoor living spaces for people, as that is our passion! I will just give you some of my basic thoughts. First you have a great space to work with so problem #1 is gone. Second, you don't have much to demo, the old concrete patio, some shrubs & I'd remove that tree closest to the house.
From there you can install a new paver outdoor living area, complete with fire pit, sitting walls, lighting & a fresh new landscape. You can also use that berm to the right in the picture, to your advantage & put the water feature there using it for elevation changes. You can go with either a small pond or a pondless feature both would include water falls, a small stream & lighting.
Again, you have a great space to work with, so don't go small to begin with! A job well done will be a great investment for you back there, as it can add up to roughly 10-15% to your homes value, so don't shop just on price, but more importantly on quality. Hope this helps a little bit.
Good Luck