Ditto what Dianolo said. I think that would look pretty terrible. Your contractor's right that new wood can't exactly match old wood, but it can do a heck of a lot better job than porcelain tile can. Choose the same wood species as what's in your house already, use unfinished flooring so you can refinish all the floors at once, and it should look great. (If you choose prefinished wood it will never ever match--to make it look right you will have to refinish all three floors, i.e. finish the kitchen floor and refinish the other two, at the same time using the same stain and topcoat.) The other problem with porcelain tile, regardless of what it looks like, is that it's very hard on your back. It's surprising what a difference the flooring surface makes to your comfort--you wouldn't think there would be that much difference between a hard surface (wood) and a super-hard one (porcelain or stone tile), but there really is. People with tile kitchen floors generally end up buying gel-filled mats to stand on while they prep, cook and clean up. So basically I would recommend either using wood and refinishing all the floors so you get the best match possible, or using linoleum or vinyl in a color/pattern that contrasts with the wood instead of trying and failing to look like wood. If you feel absolutely compelled to use porcelain tile, get a style that contrasts with the wood (and get ready to buy some gel mats and leave them laying around your kitchen).

You have a lovely room and it will be worth the effort to take the time to locate the right furnishings. Try Pottery Barn for to get some ideas about stylish comfort. Some of their furniture is on sale now. With down-wrapped cushions and down throw pillows, it really is possible to be comfortable without resorting to a recliner! Also, if there is a Bassett Direct near you, it would be worthwhile to visit the store, as they provide complementary design services. We had a very good experience with a store here in Florida when we were refurnishing our second home in North Carolina. I took in the blueprints and the designer drew out possible furniture arrangments and did a marvelous job assisting us with our selections. All of the furniture can be customized by fabric and finish and shown to you on a monitor as modified. Here is a link that might be useful: Bassett Direct

Sea grass with welting that matches the ground in oriental or a complimentary oriental would be my choices.

how about you carry in the same type of wood from the other room into your kitchen? a flooring guy would have no problem matching it and staining it on site. or, do a nice porcelain tile this is bella moma from Tilebar.com. it's an 8x8 tile. would work well w/your countertop . also at tilebar. (you can get 5 samples for $5 over there) you could also do a solid piece of marmoleum. in the interim, you can actually paint that vinyl flooring, (just clean it really well, and prime first) prime it, paint it white, and then do this stencil in a nice blue that matches your countertop. or do a vinyl decal to cover the old flooring.