hook rug is going, as is backsplash, but concerned over too much wood, cabinets are cherry..

I agree with Terracegallery, the cabinets are beautiful but the paneling is a bit much. Something else you may consider is refinishing your floors. This is something you can do yourself, we have a blog that you may find helpful. http://budgetmybuild.co/flooring/refinishing-wood-floors/

I agree with painting the paneling. However, if you don't want to do that you could bring in things like rugs, window treatments, more or better lighting to brighten the space.

yes, all floors are being buffed and polished.

Since the paneling looks to be solid wood, I wouldn't paint it. I'd either leave it or replace it with drywall. The knots will show through eventually even if you seal them.

I would probably think about making the floor in the kitchen and sitting area the same.

Also perimeter lighting in the ceiling and under the wall cabinets to brighten things up.

The light colored countertops help to brighten things up too but if you wanted to update then a stone, quartz or quartzite is fashionable now.