I'd start with removing the steps and terrace down the ground level, creating USE able levels, as in seating, dining, grilling, entertaining. Ulilize the entire back of the house... maybe even cut another door opening. Possibly a pergola over a portion? Decide your needs and lay out a plan.

I actually really like the deck and steps. That said a railing would help and some planters on steps to add colour etc. i think your plan is reasonable and will be lovely

Why is it elevated? I suppose there's a door around to the left? There is a lot of money in the stairs! Not the plan I would have gone with but it's what's there and no one would touch it with what these things cost! Your plan looks great.

Yeah the deck was there before and railing all across with a small staircase. Taking the side door plus the small stair case took 30 secs to access the backyard. Ripped the railing off and cascaded the steps for about ~1500 dollars for the wood.