I also think the house is adorable. Other than the tree needing pruning and the massively tall shrub on the right side (up against the house) needing to be removed (or pruned aggressively), I don't think the landscaping looks bad as a starting point. I agree with kiminpl that as newbies you should focus on taking good care of what's there and making small steps to improve it as time and money allows vs. trying anything too aggressive and ending up with something worse. If the neighbors live in massive homes, nothing you do is likely to make them happy. If that walkway really isn't being used (as it sounds like it's not), removing it could part of a phased plan. I personally don't think the right side needs another tree. Good luck!

One other thing, as far as plantings go, eventually you need to identify what the trees and shrubs are on your property. That's key to deciding what to plant around them, and how to care for them to keep them looking their best. For example, if one of your trees has a wide, shallow root system, that is going to determine what can grow under it and how to plant it. Some plants express toxins from their roots or leaves that inhibit the growth of other plants around them, etc. You may never get lush growth, depending on what the trees are. Something to think about as you progress. I wouldn't repaint the house, save the money for more significant improvements, and I'm wondering if you have vinyl siding which would make that problematic anyway. Landscaping is artfully solving problems, which to me looks like you need a stoop and as long as you're at it, some type of awning or extension of the roof to cover the stoop so that when folks knock on your door when it is raining they're not standing in front of where all the water is going to run down off the roof! It looks like you have a groovy walkway already no? After that, I also second the suggestion for a little picket fence to visually block off your lake side from weekend gawkers driving around the lake. Not necessary but would be nice. Doll it up with plantings if you like. I am totally jealous, I would love a little place like that. One quickie suggestion, to add color and contrast to your hosta beds out front, try astilbe, or various ferns, and various types of heuchera. The classic combos. Also European solomon's seal and lilly of the valley for spring scent. Sweet woodruff makes a good groundcover in shade, as does vinca, the old standby, or ajuga. For spring color, jacob's ladder or virginia bluebells or some type of wild geranium or phlox. Throw in some turtlehead and bottle gentian for summer and fall blooming. Keep it simple, don't plant all of these, they are just suggestions of easy to grow shade garden plants. You want to enjoy your time at the lake and if you don't love to garden you want low maintenance. I'm not sure if they'll grow well in your zone, but azaleas and rugosa roses are classic landscape shrubs. Any of the viburnums would give you beautiful white blooms and low maintenance UNLESS you have a deer issue. If so, they can be grown but need protection. But if your hostas are still alive, the deer may be under control already.

That "both front and back yards flood during rain" is at least a major annoyance if not potentially a big problem. It needs to be addressed and solved before any planting takes place, as solving it likely would necessitate disturbing the ground surface, which would destroy plants. If the city is years behind in maintaining the ditch, it might never happen and you might want to do the basic ditch clean-out as part of your own repair to flooding problems (of course, with whatever approval is needed.) We couldn't tell based on the photographs what needs to happen in order to solve flooding problems. You'd need to get a landscape designer or someone with expertise to look at it locally. In creating greater curb appeal, the first thing that jumps out as needing correction is the dead-end front walk. Its use has apparently been abandoned some time in the past. It either needs to be made useful and attractive ... or it needs to be removed in favor of improving the driveway route to the front door. I suspect that the driveway route seems adequate and that's probably the way I'd go. But it does need improvement. Limiting the walk to only below the overhang makes it too skinny and confined such that it could never seem welcoming. Consider adding on another path outside of the overhang.You could leave a couple of cutouts for planting at the columns. As the drive is not in great shape, you might consider replacing it as part of the process, widening it a couple of feet if possible. A simple, basic landscape organization where the plants were in good condition would help the overall appearance. Given the shade and slope at the ditch, it might work out to have yard of groundcover, as opposed to turf. (The colors are not recommendations.)

The fact of space being so tight necessitates the use of plants that comply with the plan. Left of the garage is fairly large shrub. Start turning this into a small tree form so that its bulky part, the canopy, will eventually be over your head where it can serve like a protective umbrella. Near the walk would only be a few upright trunks that do not occupy much ground space. To train it into a tree, make its overall shape similar to a sugar cone, where its tip has been embedded into the earth at the exact place the shrub grows. Trunks and foliage come up through/within the main part of the cone but nothing sticks outside of that shape. After it has reached 8' or more feet tall, you can let branches and foliage spill outside of the shape as if they were a giant blob of ice cream overflowing the the cone. Over time, starting at the bottom of the plant, remove branches, twigs and foliage so that only the bare trunks remain. You can do this to 50% of the plant's total height. (At any time of year, but early spring is the optimum time. Near the end of the growing season is the least optimum time. Plant some low growing annuals, perennials, or groundcover below the tree. (Pick one, not use all three.) See if you could do the same thing at the right side of garage door.' See if you could replace the uppermost garage door panel with one that has a bank of windows in it. Along the narrow path to the front door, I'd ditch the hedge and replace it with low growing annuals, perennials, or groundcover. Since it is long, you wouldn't necessarily need to keep it all one thing for the whole length, though you could if desired. It could be a strip of multicolored impatiens, or a strip of variegated liriope, It it could have color at the beginning and end while the middle run is groundcover. For the blank wall, consider some flat, outdoor art decor. A flag stretched in a frame would work. But there's not room for plants or anything else to stick out into the path.