I think I would keep the bar but would lower it to counter height. Counter height would be better for use as a serving station.

Thanks so much for the helpful comments! I should've been clearer - I'd be removing not just the bar itself, but the entire wall. There'd be one support beam left (which you can see to the left of the bar) but otherwise it'd be open.

Do you want your guests in the kitchen? Or are they there already at the small table?

I have a very similar set up. We had a full wall where the bar area is, which we took down to the half wall. I like having some separation and I also like the bar built up slightly, although I know a lot of the designers call it dated. Like yours, my dining room is not at all formal and we eat 99 percent of our meals there. I would leave it unless you’re going to incorporate the dining room and make it all one large kitchen space.

It is tough to see but it seems your preferred eating space has to be cramped. I think it would be worth doing some mock ups of taking that wall down, adding and island for prep and down sizing into one eating area. As your children grow up you might find the island being closer to you as you cook becomes a place people want to sit and visit, have morning coffee....

If you'e not really using the bar, get rid of it and open the room up. A island big as possible a must.

The most functional use of this space would be to keep the L shape in the kitchen, add and island and remove the wall and bar. This would also add value for resale.

If no one sits at bar, then change.

If need more storage narrow cabinets under could work. make them 1"less deep than current overhang

It's popular to open things up & have everything countertop heigth instead of bar heigth. But, In this layout, I like what you have to create a separation & not see the kitchen countertop while dining.

I think part of the reason why your're not using the current dining room is that you have to walk around that wall. I'd imagine that if you remove the wall and add an island for prepping, you'd use the dining room as your main eating area. I can't tell whether the kitchen and adjoining DR are wide and large enough to accommodate both an eat-at island and a separate dining room.

Hmmm, you have to ask yourself some more questions. Here's what I would do and why - see if these reasons matter to you or not. There are no right or wrong answers - it's what's more important to you and how you would use the space. You'll have to live with it for a while, regardless of what current trends are.

1. I'd keep the divider to keep the storage but would lower it to counter height because I'd want the serving space, making it a counter without the overhang and dump the bar stools. Kitchen storage is important to me as is counter space. Having the counter between the kitchen and dining area is also convenient since most people these days don't have the room or don't want a separate buffet in the dining room.

2. Get rid of everything above counter height in the divider, where structurally possible. To me, the current arrangement looks awkward (maybe it's just the photo angles) - the wall doesn't go all the way up to the ceiling so the kitchen isn't completely isolated anyway. Or would you like an even more defined space by closing the divider all the way up to the ceiling?

3. For the number of guests I normally have, the dining room would be big enough. Is that the case for you? Or do you usually run out of table space and guests are eating at the kitchen table. If so, which is more important - having the stuff in the cabinets on the divider wall always at hand OR put that stuff elsewhere (e.g. basement shelves) so you have the option of a bigger table that can be expanded into the kitchen space by removing the divider and making it completely open? Are the items in those cabinets used almost everyday so you want them on hand and are willing to put up with guests eating at the kitchen table once a month (or less, only for big parties)?

4. I like family meals gathered around the table, with people facing each other with no smart phones allowed at the table. I do not like people lined up along one edge (whether it be your current divider or an island in the kitchen) facing only the cook like the lunch counter at a diner. What do you prefer or don't care? Remember, there is no right or wrong answer, especially for this one. Don't decide based on what sounds nice but what's important to you and your family today. If they currently eat at different times or have smart phones at the table, this will probably not change. You want your space to be something your family can live in; you aren't casting a Walton's episode - nor a Houzz photo shoot.

5. I'd put in a kitchen center island - for work and storage space only, without an overhang or seating and make the dining room the eating space for family and guests all the time. Using it once or twice a month is a waste of space - for me. How important is it for you to have a separate dining room for guests? (Note regarding my preference - how long are you planning on staying in the house? If not for long, consider what it means for resale to go from two eating spaces down to one.)

If you take out the wall and put in an island, you gain back the lower cabs lost from the wall. With the dividing wall gone, you will have direct access to the dining table and use it more...you will use it as much as you do the kitchen one now. You will gain a wide prep space from the island where you need it....in the main work zones of the kitchen.

The hiding the mess comments puzzle me. I am by no means a ”neat” cook or a neat/clean freak. It does not bother me one bit to make my work area cooking mess as I prepare a meal...I simply clean up after I am done. I am not sure what kinds of messes people think have to be always hidden.