It's a lovely space. I would begin by de-cluttering that corner by the sink. Move everything, the coffee maker, toaster oven, etc... to your computer area (find a new spot for your computer) or to a slim coffee cart that you can place opposite the peninsula.

Then I'd focus on lighting, prettier pendants (no bare bulbs showing below the shade), and a chandelier over the dining table.

I like Dan's idea of using beadboard on the back of the peninsula.

Get a table pad and get a collection of bright or eye catching quality tablecloths. Find good old ones at vintage shops. Floral or other centerpiece of pottery or wicker or glass. Gorgeous natural light streaming in those windows so color, pattern or something on that tabletop.Not sure I'd bother with floor rugs as the wood is nice and the light bounces off-I personally would love the feel of that, if the occasional to frequent sweep with broom didn't bother me. A Vacuum of rugs doesn't make anything easier.

I would paint the peninsula base orange. Or red. Or green... Try a few different colors. Here's my old kitchen - awful, I know. But I painted my peninsula panel and it helped a lot.

Before painting:

After painting (but before renovation:)

Hang your hopefully non-neutral wall art. Add colorful carpets. Change to a colorful table runner. Consider adding colorful chair pads. Paint the peninsula. Consider adding a decorative type item (bowl for fruit?) near the end of the peninsula. If you don't use the seat at the end of the peninsula I would remove it as part of decluttering. If you don't use any peninsula seats I would examine whether you need them or whether they aren't comfortable enough.

Post on the home decorating forum too.

Thanks for the thoughts. I obviously am a fan of neutral. ;) I have 4 kids age 13 and under, so all the counter stools are used, and ideally could use 4 more for all the friends that are always here! Love the idea of new pendants. That is a must. Will look at adding some color. :)

If you switched the counter stools to something with color, instead of drawing the dark floor up, they could add a bit of color.

Yes, definitely need new counter stools. Of course I am drawn to some silverish ones from Target... :/ but not going to get those ;)

First thing I would do is add color and pattern to the dining area with drapes. Add a nice big chandelier over the table. I would then, get stools with backs and use pillows that compliment the drapes. I'd add counter accessories and a vase on the table. Large piece of fun art across from peninsula. You like neutral so I'd start with a shade of green as my base color.