You are not going to be able to grow anything under that deck, so my question is it tall enough to walk under? Do you want to BBQ here? Loose the railroad tie borders, too linear. I was thinking about a fire pit, cobblestone pad and a fence for privacy.

Consider leaving the railroad ties and use them to install a floating wood deck. Have it repeat the style/color of the upper deck so the design makes sense.

You could make the area under the upper deck a cozy retreat by hanging weather proof curtain panels with grommets which you can easily slide open and closed to create whatever feeling you want day or night. Install an indoor/outdoor wall to wall carpet in that area. (but you would have to install a sub floor first of course.)

This would be a start. Think about what functions you want your two areas to provide.

oops! just seeing the last photo posted above! That is the decking idea I was suggesting - looks fab.

Consider creating a patio, including the area beneath the deck, connecting the outer deck post to the house corner. You could make the patio simple or elaborate.

A patio with the edge curving away from the house creating a quarter circle design would work well.

You could begin with digging out the top soil in the outline of the patio shape you prefer and filling the space with small gravel and add paving stones or brick (matching one color of brick from the house) atop it with sand in between. You could leave more space between the stones or bricks and let grass grow between.

You could hang a porch swing from the porch.

If you created a larger patio, you could add a fire pit within it (away from the house) or a BBQ at the far edge of the patio.

You could leave a 4' circle of "green space" within the patio and plant an ornamental tree there or use that circle it as a flower planting space with a concrete bird bath in the center.

You could add an arbor above the patio doors and add some flower hanging baskets or wind chimes to the arbor or the end of the deck.

http://www.designingcity.com/backyard-patio-ideas-to-create-a-totally-cozy-outdoor-space/spectacular-simple-backyard-patio-ideas-which-presented-with-wide-garden-scenery-and-twin-wooden-back-chairs/

I like the idea of putting down bricks for a patio. Unfortunately I think if we did a floating deck it would be awkward with the height of the deck and the sliding door from down below. Do you think the bricks would hold up if I skip leveling sand, and just put small gravel, bricks, and dirt in between the bricks? This is not our "life" home, but a 5-8 year plan home.

Bricks or paving stones with tops ground level would work. A really good patio wil help the resale value of your home or, as long as you don't cement them in, you could take them with you (perhaps leaving grass or poured concrete slab behind) to rebuild your patio at your next home (should you choose to do so), therefore, investing in the kind you actually want could be worthwhile.