I don't know what the rule is on this, but we put our 4" cans with the edge closest to the cabinet over the edge of the counter. That way, they shine right in front of you when you are standing at the counter. A 6" would get pushed back farther if you use the edge. Stand at a counter where you would work comfortably and look up. My thought is that you want the center of the light just in front of you and hitting the counter in front of the upper cabinets. To close and they wash the cabinet more than light your work space and too far back, the center of the light will hit your head rather than toe work area. Make sense?

I guess my main take-away, which I don't seem to be communicating very well, was that there was something about the 5" (or are they 4"?) that looked significantly better (and less cheese hole like) than the 6" cans in her home on similar ceilings. They just looked a LOT less obtrusive. I think part of it was the size in our small homes with short ceilings. But, I think part of it was also that the inner area was different. The bulbs were not receded into the cans. Instead, there was some kind of casing that was even with the ceiling and the bulb area was small (maybe 2"?) and even with that line, too. The lighting was not diffuse. It was more sparkley and bright. It was just really interesting, given there were cans on in the adjoining DR that were the 6" we've been considering - and could still use in our adjoining hallway. I'm explaining this HORRIBLY. I should have taken pics. Is anything I am saying making sense? Do you have any idea what lights were in that kitchen?

I recently faced this dilemma and ended up with most of my 4" cans centered on the edge of the countertop. In your case, I would put the cans on the window wall closer to the wall because you won't have undercabinet lights there. Also, I have a can directly over my sink and then one on either side (about 3' apart) and it is excellent work lighting. This a more aesthetic consideration, but I would consider whether you could do a combo of pendants over the peninsula and then flush- or semi-flush mount on the window wall, 12" off the wall. Or maybe all pendants if they're not too long.

One or two wall washers to highlight the mantel area will be good if you're putting great art there that needs to be seen. Without floor and table lamps, you'll never achieve the warm coziness that family spaces require.