Wow I love that! Thank you

Hi! I would most definitely add two bar stools to the bar.
I would also add a kitchen table, and add three chairs and use the bay window as seating. You can easily add a pad and pillows to the bay window:

http://deciture.com/shop/furniture/9/white-camille-dining-table/

http://deciture.com/shop/furniture/9/white-camille-dining-chairs-rush-seats-set-2/

http://deciture.com/shop/furniture/9/honey-schoolhouse-counter-stool/

Hope this helps!

Should I paint or keep the colors?

I really like your colors. They are calming, and go nicely with your floor.

Please tell me you have cookbooks, or gardening books, or sewing books, or anything of the sort? I'd put them on the window sill with really cute bookends, and place a cheerful, comfortable chair to the right. Maybe a small table with a drawer for notepads and pens. Use the corner for planning and dreaming. The chair and bookends here from Overstock.

Is it safe to put a seat in that window? What about the glass? It would save space to have some cushions there instead of more chairs. It's about that height too.

@Rina... I love the idea! The color of the chair is perfect.

Check this idea

:)

Your question sounds familiar to me.

Here is an example of a breakfast nook I designed for a client with a tight seating space.

No matter the size of your space, I believe a client can always benefit in a maximizing way once they decide how they are going to utilize the specific environment.

Another option is to build-out some cabinetry on the right-hand wall if it's wide enough and place a small table & chairs there

@trebinje... I've though of that. I was considering a "coffee area" because of the small wall and plugs right there. It might be a good transition into the main living area. I need to have a breakfast table with a few chairs too. Something like this area I saw floating around on Pinterest.

After searching around I have thought of a couple options.
1)First I thought of getting a counter height table set that comes with 6 tall chairs. I make cushions and toss pillows for a bench window seat. I put two chairs from the set at the counter. Push the table toward the window. I put decorative window film (frosted glass) over the bottom half of the windows for privacy. A pretty rod at the top with valance hung by clips. This allows more seating if I need it and extra space if not.
2)Second idea would be to just get a smaller drop leaf table at regular height with a couple comfy chairs. Add tons of plants in the windowsill. Get a small cabinet and shelf to set up a coffee bar to the right of the window.
Thoughts? Thanks in advance.

Maybe a custom built bookcase under the bar overhang would handle the coffee cups and clutter along with some books and teapots. Then have two very comfy armchairs with the drop leaf table and the plants would make a great lounge space. Unless of course you really need to seat more people.

We need the seating. Otherwise would be far easier to decide.

Think your idea of counter height table and chairs is a good one, can everyone in your family get up onto the chairs at that height, just a thought.