I don't think it makes your kitchen look too small but it's a little hard to tell without seeing the floor plan or the adjacent spaces. If you feel that it makes your kitchen look too small, I think a cart is a great way to remedy that, maybe make a little coffee bar area.

Who was at fault in the oversight? They should be responsible for the solution. Personally, I would prefer to extend the cabinetry with even more expensive drawers; here's why.

thank you for the info

If you can't resolve this with the contractor, I would put an amazing thrifted glass-topped secretary there, paint it in a color that harmonizes with the living/dining room. This could be a transition piece to your dining area. Depending on your style, a bar cart/dresser/coffee with art or shelves above it would be functional and attractive.

Or something like this to fit the space with wood shelves in same wood finish as cabinets.