Yes, new countertops and getting rid of the busy early 2000's mosaic tile will really update it. It's all kind of monotone brown right now. I also don't think it's necessary to tile all the way past the peninsula wall like it currently is. Start by picking out a new countertops (your cabinets are a nice neutral so you'll have lots of options! but maybe stick to warmer ones with the floors) then do the backsplash after it's been installed.

Perhaps these will help:

The New Look of Kitchens

Slideshow of gallery of kitchen and baths with wood cabinets

Agree. Right now everything is the same muddy color. Highlight the cabinets with a lighter granite and quieter backsplash. Look at Cambria Windermere for the counters. It’s a light beige with copper and charcoal veining and some sparkly spots. It goes with everything. (I have a friend with espresso cabinets and one with maple. Both have Windermere and they both look awesome.)