Yes, add uppers to these. The uppers are not even finished! so put the extra row on this time with crown molding. Yes, paint cabinets and new countertops.

Here is my recommendation for a modest budget-
-wallpapers gotta go, paint the walls
-get rid of the blinds for a more spacious look (maybe a roll up blind, or a patterned vinyl on the lower portion of the window for some privacy)
-move the cabinets closer to the ceiling, add floating shelves underneath.
-back splash!
-oh and get a counter depth fridge, it frees up so much space!! My fridge died, and I replaced it with a counter depth and it makes such a difference.

Finish removing the wallpaper. Replace the counters with white counters. Paint the walls and ceiling a color which goes better with the cabinets. Change the pulls and knobs.

First address the lighting before choosing anything else . Pot lights LEDs in 4000K range then how much money is a modest amount. Having cabinets painted is expensive and if this is going to be a change for a long time a professional paint job is the way to go. Yes cabinets to the ceiling would be nice but IMO unless you change all the doors the new ones will always look like addons even if they are glass doors. A counter depth fridge for sure. The eating space looks very crowded take away that ladder shelving and move the light , a new one I hope, over to hang above the table. also with LEDs .Is that your only DR ? if not IMO that kitchen could benefit from a complete redo and have it extend into that space .

I agree, start by removing the wall paper, and getting the recessed lighting put in, I wouldnt' waste the time painting the cabinets, because some of them look like they are a bit off, like the side if the fridge. I would replace all the window treatments, then decide when you can fully look at making it yours, putting in new counters on a cabinet layout that might never look better or function for you might be a bit of a waste. IMO not a pro

Just concentrate on wall cabinets for now. Nothing else (except lighting). look into a good quality RTA 42” h wall cabinets with a door style you like. Then, perhaps a smaller size stack with to the ceiling molding. Get an estimate and wait till you can afford that part.

After all the work of trying to get these existing cabinets to look right....down the road you will not be happy. You will wish you wouldn’t have bandaided it.

Start with a vision of the “whole“ look.

Thanks, everyone. Appreciate the feedback. Most is what we were thinking. The kitchen was even uglier when we bought it. The floors and appliances are new. They weren't just ugly they were gross. The cabinets look wonky/unfinished is because we lifted them in order to fit the new appliances. The cabinets are level, just missing the side piece. We are probably years out before cabinet replacement. Our cosmetic budget went to structural repairs. I'm semi handy, so I was thinking of painting the cabinets myself & looking for matching uppers at Restore Habitat. Or changing out the doors. That may be too ambitious for my skill set though.

I think if you give your self some new lighting and new window treatments... and remove all the wallpaper you should be much happier. I totally get the DIY but I think with cabinets that gets harder than us DIY'ers might think?