I still prefer a SMALL tree form, but not one that dominates the ground floor space. It could be coming out of a mounded shrub in order to screen the utilities & AC. (... the picture representing fully grown plants.)

Maybe they will let you add to their stone wall?

Or replace it with something ?

Raised planting bed with red Japanese maple in center

Possibly a panel of sorts built out of cedar or stained. Lots of wood variations to replace bright white lattice. Easy to build.
But actually I like a tree there...
Just not a blue spruce...
Something smaller.

Looks like there is already a red Japanese maple off to the left.

A slender Hinoki cypress could work (Chamaecyparis obtusa 'Gracilis') - never gets too tall or too wide. But if you want a structural/non-plant screen, I'd go with some sort of cedar panelling or trellis to screen off the area, likely placed at a bit of an angle to the house. A vine to grow on the screen/trellis is also an option.

Zone 6b...hot summers, cold winters

Consider removing the lower limbs of the tree in question. Add as shown under the tree.:

Unfortunately the tree is on the north side of the neighbour's house which means it gets limited sun and it would take years for any plant material planted underneath to reach a mature size....leaving the A/C exposed which is what we want to camouflage. Like your shrub additions which is an option once we get this other problem figured out. Thanks.

Wayfair has some pretty coolmetaloutdoor screens

I thought I uploaded a picture earlier today, but I guess not. My solution is like Dougs, but changing out the tree to something smaller, with a shrub growing below. It does not take years to grow something below the tree if you pick something suited to the conditions.