Oh and I forgot to mention that I would like to use grey and orange..

You may find yourself wanting more lighting--a pendant or two hanging above the sitting area could work well! Or maybe just switching out the semi-flush mount on the ceiling for a different one? There's also a light above the sink that may be a good candidate for a replacement. You'd be surprised by how changing just one light fixture can make a room look completely different.

All of the lighting changes suggested here fall under the category of ceiling lights, so here is a great place to look for new fixture ideas: http://www.lightsonline.com/ceiling-lights/

Not sure if these are wood cabinets, but consider painting them first.

Updated steel appliances would also bring in more light, as would a different floor material in which you have many options. A light hardwood would be nice, or you could have a tile design with orange accent pieces. Refinishing the cabinets in a grey could either make them 'disappear' into the wall, or make them pop out, depending on what grey you use. You could spray in grey paint or you could apply the newer cabinet trend of gray distressed finishes. Caesarstone countertops might be another option for bringing in an orange color accent. Take a look at their orange family: http://www.caesarstone.com/en/The-Catalog/Pages/By-Color.aspx. Take your ideas to a design professional with remodeling construction experience or a design build contracting firm, they can help you explore your options on building with the existing features you want to keep.

I think changing the flooring would be a good choice for updating the room, and I agree that mini-pendant lights over the peninsula would be great too, provided they're not positioned to interfere with you cabinet door opening.

Add roman shade to window. A charcoal with a white border would work. Add some color in accessories. Pick one. I Like yellow with gray.

No small rugs in kitchen dated and can be a hazard. Show off new floors.

Is that enough light? If not go a track stainless light Ikea carries some nice ones. They work off box you already have. Easy to install.

If in budget update to stainless appl. All should match. Get a counter depth refrig. Much better for a small galley kitchen.

Paint the kitchen gray and use orange accessories to brighten it.

Don't change the subway tiles or the cabinets. I think 3 things will make this place look very different and new. 1 - A flooring update will lift this kitchen dramatically. 2 - Increase/improve your lighting options. Your space could be brighter. 3 - You could update the counter as well but the change would be less noticeable and perhaps not worth the money. Definitely stick with accessories or painting walls gray (as mentioned above) for your gray and orange color preferences.

Yes, what's up with the counters? What is the surface and color? Agree with others about the floors. Your cabinets look fine, no need to reface or even paint. Here are pics of linoleum flooring which would be an inexpensive upgrade for your floors.

Do you use the bar for seating. Probably would remove the end of bar, looks like with that and the fridge it's a tight walk through. Cabinets look fine, would first try painting them and of course new hardware.

I would add a orange backsplash an change the flooring and paint the Cabnets and the kitchen counter a gray color

Also get MORE lighting and add orange or red accosorys

As other designers have pointed:
Depends on your budget permits and how handy you are some few points to consider

1) Need more light - can be solved by Pendant light above sitting make sure you have clearance for upper doors to operate. Some pot lights and remove the fixture which is in the center of the room, add Under cabinet lights if you don't want to go for wiring and other hassle you can buy from Costco LED lights pack of six with remote works on batteries, add light valance, LED strip light in kick plate.

2) Flooring slate looking - Porcelain tiles or Industrial vinyl, or water resistant laminate which looks like slate tiles available in Big boxes in our area.

3) Counter top - go with Black galaxy Granite, or Quartz Black with silver flakes keep minimum 9" over hung if going to sit on the other side.

4) Paint on walls Satin finish white color Kitchen and bath grade mold and mild dew resistant.

5) You will need under mount sink and a faucet ( Check with IKEA they have some nice goose neck with pull out very sleek and very cost effective)

Appliances, Refacing doors etc depends on budget.
Invest in make over looking to how long you are going to live in this house? What is going to be return on your investment etc.
My 2 cents !