IMO terracing is the best use of a hillside since that gives you nice flat spaces to work with No it is not cheap but I sure would not want my kids playing up there a roll down that slope could be deadly.

Where/what is the view that one would be after with viewing deck? Is the play set not used? The slope does not look 'death defying' to me. It does not seem that you are trying to make the slope into a view that one would appreciate from the patio, as a vegetative barrier is installed at the fore section of the retained area. Is this the direction you're trying to go?

What's growing there is adapted to your climate and I'd leave it alone. Maybe add a few more shade trees, perhaps with spring bloom and/or fall color. Anything else will be costly and require lots of maintenance,

The outdoor spaces you suggest really only work well when they are attatched to the house...if there is a stupendous view.. steps or a trail to a small viewing deck may get used once in a while

I would suggest a pergola over the patio...to cover the seating and dining area.. making that area more comfortable and useable all day long

We constructed widely spaced open pergola so that we can add a shade cloth top in the summer when shade is needed.. and remove in the winter when it is not..,

Thank you all for your feedbacks. The slope is facing a small hill with glimpse of mountain from a far, it’s pretty serene up there, and that’s the reason we want to utilize more of the space up on the slope. Also, we’re hoping to add more to the outdoor living space to increase the value of the house in the future.

The most inexpensive device to aid in transgressing a hill would be the step-ramp. Conceptually, it would be a bit like terracing a path. You place curbs (logs/timbers, etc) across a path at intervals allowing you to grade each section of the path at a slightly shallower pitch. Additionally, the switch-back is a serpentine route that allows for climbing the hill more gradually, as opposed to going straight up or down. The combination of these two devices could make getting up or down the hill much easier, without breaking the bank. What you "pave" the path in would be up to your preferences and budget. The cheapest would be shredded wood mulch.

Then, whatever "floor" space you create at the top would, again, be subject to your budget and preferences ... just like building a patio. You'd make it a size that suits the needs you want to have fulfilled. It couldl be a graveled area, a wood deck, or something more expensive and permanent if that's what yo want.