It sounds like you need a refresh for your kitchen. I think taupe painted cabinets would look really nice. I'd choose maybe some aged brass pulls to give the room some jewelry, or some chunky silver pulls. That would look good and feel luxe.

I wonder if I'm "ahead" of the next trend, because I really like white countertops. So if your tile is in good shape, and the grout isn't making you crazy, keep your tile counters.

Another thought is that if you are tired of cleaning the grout around your tile counters, you can look into white laminate counters. They may have pre-cut white laminate counters at Home Depot, or Lowes, and it really wouldn't cost too much. They are very functional and nice looking.

One thing you could do that would really dress it up, without spending too much $$, is to take out that short backsplash, and put a beautiful tile covering the whole backsplash area. Voila! It will look great. here's some inspiration for you:

You can do anything, it depends on how much you want to spend. Removing wall paper and adding a pretty tile backsplash would be great. Definitely painting cabinets and changing hardware makes a huge difference. Removing the soffit and putting glass uppers on top of your cabinets so they go to the ceiling would be nice (again pricey). Counters only need to be replaced if you don't like them, obviously new ones would be beautiful. It all just depends on your priority.

are those cabs solid wood or that melamine or themafoil material? I would not pick a taupe color for the cabs. leave them white and get new, updated hardware for them. (you can spray paint the hinges to match if you change metal colors). those plain gold knobs are very dated.

if you have basic size boxes, look at just getting new cabinet doors. (or used oak ones. people on craigslist are always trying to unload the oak wood cabinets)

paint the walls a taupe color.

Pre-fab granite/quartz countertops. these can be had for 350-500 for a 9' countertop size. come in about 50 different colors

these are some of the newer ones I saw last month. they also have marble and quartzite. you hire a fabricator who will cut it to fit your kitchen. for your small size, maybe 800-1k or so. depends on where you live and who does what.

go look at some stone yards and see what they have. also check w/a place that does fabrication and see if they have any remnants or half slabs leftover. you can get a great price on those.

what ever countertop you do get, do not get the 4" piece up the back. leave it off if you want a backsplash.

I agree with Beth; I would keep the cabinets white and invest in upgrading the countertop.