Both are nice. I would extend the flooring into the kitchen for a cohesive look

Keep the kitchen tile. You might see if you can you find the same tile in a darker (tan) color for the living/dining area. You could then use that same darker (tan) color tile as or above your backsplash -- maybe one row of tiles that is, if not the same solid color, has that color in it. this would link the rooms visually. You can always add a rug and change that with your changing tastes without the considerable cost of redoing the flooring.