I would stain the cement a nice red sandstone color. This would help liven it up a little without adding clutter. There are many colors of acid stain for concrete that you can choose from.

How about an outdoor rug with color to anchor the space?

I think an area rug and coloful pillows will do the trick. On the wall where the red round thing is, you could hang outdoor art. Treat your outdoor space like you would an indoor living room for a cozy feel.

Here's a coral outdoor area rug. Then you could get coral/turquoise pillows for the furniture. Since it's covered, you don't have to use outdoor pillows.

Pillows...

If I stain, it may have to surround the pool into the yard. There's a low spot in the surface in front of the table where rain and sprinkler water collects. Would that mess up the rug? I like the coral and turquoise ideas. Maybe this year I'll try some pillows and accessories and take it from there...

I love the above suggestions for an area rug, great way to add color and define the space. I would relocate the water hose and move the chair from beside the settee to that space and angle both chairs inward to face the settee creating a good conversation area. Think about maybe adding a couple of small side tables with some hurricane lamps or lanterns?

I'll try the seating change. Thanks for that! I really don't like the locations of the water spigots around our house! This is the only one in the back.

What about painting the window and door trim a different color to give it more depth? I agree with a rug or painted concrete to. You can paint it to look like tiles.

Yes, painting the trim and doors definitely crossed my mind. The house is super brown all over. I think the previous owners were fearful of color. All the tiles inside are 4x4, 6x6 and white. I was also considering doing the ceiling area Robin's Egg Blue like at the Grand Hotel on Makinac Island.

http://3.bp.blogspot.com/-sXxW-eNwMag/T7LKCxIXmgI/AAAAAAAAAxU/xuszhkOG_rE/s1600/Mackinac%2BIsland%2B071.JPG

Helps keep flying insects and birds from nesting.