Speaking from the experience of having a basement that used to flood, the former owners had a concrete patio under a deck on the side of the house where the ground sloped toward the house. The concrete patio also sloped toward the house which is a violation of building codes and common sense. There is a formula for a certain amount of slope going away from the foundation of the house. Your original side yard probably was very good for drainage, and changing it will make water pressure against your basement. I spent a lot of time creating ditches rather like your original one to protect our basement from future flooding. The low part in the middle could have a brick or concrete walkway, and the sloping sides could be planted with a variety of perennials for a nice green look. Then you wouldn't have needed a retaining wall in that area, but I would have wanted to install a retaining wall on your bigger slope past the deck to make a level terrace that would be a good place for some trees. So before everything is set in stone, I would advise that you find out what the code is for slope away from a foundation and follow it. BTW, your photos and diagrams are excellent!

Would pavers or bricks bring the porch floor to the same level as your DR floor? I can picture a sun room with this type floor.

We had a similar situation with what once was a porch roof and the area above it was enclosed back in maybe the 20's. Prior owner never bothered to level the floor. We leveled the floor by cutting down 2X4's and making triangular "shims" to level it. The taper began at one end of the 2X, at the other end of the 10' lengths they were 3.25" The 2X's were glued and screwed every 12" to the wooden deck (which was once the roof for the porch) and we also glued and screwed a 3/4" subfloor to that and added sheet vinyl. You've got it easy with the concrete. We also sistered LVL's to the structure and brought it up to current code per the City. What's weird though, is that the windowsills on the side walls are still at the same pitch as the floor was, but that's another chapter.

Yes, exactly. Sorry, Bethany, I didn't mean to derail at all. I just also don't want you being discouraged, and I don't appreciate being insulted. Have you considered replacing the current outside door with a French-style door? Those extra glass panels will let in more light, and I think those doors always look so pretty and welcoming. (I'm planning to replace the sliding glass doors in my kitchen with a single French-style glass-panel door myself.) Are you planning to put a TV in there? I always like to have a TV for my guest rooms; it encourages guests to take some time for themselves a bit, and it's just a nice amenity to have (sometimes I'll go hang out in there and watch something on my own, as well, so my kids can have the main TV). Or maybe a bookshelf, in a bright or light neutral color? For the kitchenette, you can buy unfinished cabinets, already made, at any HD/Lowes. I'd paint those white (or bright) to lighten up that nook some. Or hunt around at second-hand/surplus stores and find, say, a vanity that fits that space; build a countertop out of wood slabs--surprisingly easy!--and give it a couple of coats of acrylic or polyurethane. (When my parents converted our basement and added a kitchenette, my dad cut and finished a wood door to use as a countertop, which worked really well.) You could install a "rail" around the space to set the countertop on, with just a couple of 2x4s; then you won't have to worry about attaching it to the cabinets etc. below. Or paint it whatever color you use as your secondary--you don't really need full-on kitchen cabinets there if there's not going to be a lot of cooking going on, and vanities often have more interesting fronts and details than kitchen cabinets. (I know someone who used an old dresser for their kitchenette, actually, and painted all the drawers different cheerful colors; it looked really cute, and they just put melamine plates/cups/etc. and a few snack items in the drawers, and filled the other drawers with linens and things. Your minifridge can fit under that countertop as well, so it has a nice cohesive look, and if you get a flat-front one you could use construction adhesive to glue a panel front to it, for more color and cheer. Or use a spraypaint made for metal, in any color you like! Above it, maybe a nice beachy picture in a white frame? Something to bring a little more interest into that little recess--shelves are good, too, of course. Oh! And in our previous guest room, we made a little feature out of the mantel (it had a small non-working fireplace) using a string of fairy lights with glass beads etc. attached to it, and some votive candle holders (I basically just wound the lights around the candle holders). When the lights were plugged in and the candles lit, it looked really lovely--and much more expensive than the $15 or so I paid in total for the lights and holders. You can get battery-operated lights to use until your outlets are installed. And speaking of lights, are you planning to put in regular floor or table lamps as well as the ceiling lights? I also think you should paint the trim a nice bright color, and maybe that "beam" the runs across the ceiling, too.