Do you have a dining room so that you can eat at a table if you choose?

Yes theres a large formal dining room on the other side - so this area would be more for informal.

I urge you to let it remain a table and chairs space. It’s a wonderful spot to enjoy the view. I find banquette seating awkward and uncomfortable, and the windows are too low to accommodate back support.

I would enjoy sitting at that table and looking at the view drinking my morning coffee! You have a huge kitchen as it is I have a itty bitty kitchen in an itty bitty house I would love that but let's not talk about what I want LOL I see you have a possible roll top desk in the hallway? It's right there on the right side by the dining room if and you have a big pantry you could extend that one cabinet where you marked out with the tape maybe you can make Cabinetry down that hallway where that desk is if you need more

Its a great spot for looking out the window Im just struggling with the seating. Its so 90’s and boring and I go back and forth about a round table in a square space with no seating on the one side or countertop seating (peninsula) or maybe a couple small sofa chairs or something. Maybe get rid of the penisula and install a small island with seating?

I would not put Sofas in my kitchen! You could get along narrow table you already have seating at your Island it's very small island but you have two chairs there you have a dining room for the biggest share of people and I'm sure that works for you you only need the kitchen for your family everyday if you have family

The 90’s look can be updated by eliminating the window treatments and choosing a dining set that suits your new aesthetic. Here’s one example.

Hi! If you are tired of the central table another idea is to create 2 seating areas. Leave the counter as it is, but without the island usage, and a create a banquette seating on the left side. Add a second seating area on the right side facing the window, with a small armchair, ottoman and a small table to drink your coffee and reading a book in the morning. The view is so good to miss it! I don't know the style you vision for the kitchen renovation, but there are some beautiful banquette solutions to look modern and updated! I am not sure about the dimension but from the photo i assume there is enough space for this.