It depends somewhat on what is going on in the adjacent part of the yard, and how you plan to separate this area from the rest of the yard. As a first stab at an idea -- I'd pave most (or all) of the area, especially adjacent to the house. That would prevent the splashing of the red dirt onto the house. A plug-in fountain. Also a patio umbrella, some chairs and loungers, and a table of whatever size for your intended use -- just small side table(s) if you don't plan to dine out there. Plants around the perimeter; maybe a couple of potted plants on the patio. How is the area accessed? I think I see a door in the corner -- right?

Can you post pics of the house and the area in one shot. It makes it easier for suggestions.

is it the North side of the house? .

I would ask a landscaper/hardscaper to see what drainage issues may be and define the entrance.

Some visual

Celery, Visualization, I love the rendering with the fire pit!

Here are additional pictures. The area is facing our backyard. The large adjacent tress will be removed as part of the garage build and the siding you see will be painted to match the rest of the siding in the back. We've been getting a lot of rain, hence the mud. :/

I should add that the plan is to eventually add a cocktail/plunge pool to the backyard.