If the area is long enough, the split dining/seating area seems like a good solution. Do you have need for a formal dining area?

We have a small eating area for four inside the kitchen (which is fine for just us) so not sure if it’s more awkward to have two eating areas next to each other or if I should just put a couple chairs by the fireplace in a second seating area / transitional space (ie pull out the folding table for company) ?

I guess it depends on how much you entertain. If it's frequently, the idea of a dining room seems nice. If it's only a couple times a year, then the folding table is adequate and two cozy chairs with a small table between them for coffee or drinks is a nice option.