I live in the South where painted brick is very common, and I love it. However, I don't think your brick is ugly at all! Maybe it's the effects of the sun fading it, or whatever, but it actually looks quite nice to me. My concern about painting your brick would be the amount of sun you say your house gets, as it would likely cause your paint to fade unevenly. Also, as someone mentioned previously, painting your brick would just create a different huge block of color to look at, and won't necessarily help to reduce the impression of size. If I were you, I would give my shutters and trim a fresh paint job; Charleston Green shutters and door with a warm white trim would go great with that color brick. Replace the brass door knocker and handle with some something less bright (even antiqued brass would look better). I also like the idea of the planter boxes for the upper windows to add a little softness and to visually break up the facade a bit. You will never achieve a cottage look with your home, as its overall design is inherently more formal, but I think these few smaller changes will go a long way towards helping it feel more cozy and warm and reduce the impression of size. Once you have your house spruced up, deal with the problems of the retaining wall separately. I agree that a painted retaining wall would not look good at all. I like the idea of a stacked stone or similar material.

As others said, I can't really tell what's going on in that space from those two pictures. But in general, it's good to put an entry table or piece of furniture in an entry way. It's also good to hang a mirror over it. A lamp is nice as well. And yes, you should extend the wood flooring if you can. But to me that table looks too short for that space.

You have a very attractive home! I would not darken anything. I think the white is an important element. Regardless of what you do to the steps you must have handrails. I would go with the crisp white to match your trim. There are some nice white vinyls out there. The biggest impact will come from landscaping. I would get a professional landscape/hardscape plan and implement it as the budget allows. Yes, get a spiffier light fixture.

removing windows and putting in a door is easier than vice versa. remove the brick, frame out the area for the door, install. if you want to bring up the floor level,(what do you plan on doing w/the fireplace? you would have to redo it and the book cases) for the new floor, they would have to lay joists, sub floor, and flooring to even it out to the other. At this point I would advise you to replace all of that white tile and do the same flooring throughout the first level. can you match the wood you have in the other room? .Oh, demo of all that tile? 1-2 K (can't see how much you have) remove a window and install french doors, about 2-4K. building a banquette? have no idea. 1-2K? new table, custom made cushions, etc. I don't mind the sunken part. I'd do the french doors and close off that other door by the nook. would be cool if you could extend that whole side of the house further out another 6-10 feet. I'd rather do that than raise the floor level. i'd also widen your stair area leading down. on the living side, you could do something like this w/stair sides (little built ins) install a cool beam above it: or move the stairs to one side If you replaced your windows w/doors, you could do one large sofa, and place the two chairs as you come down the stairs. (that's why it might be nice to move the stairs off to one side, gives you a bit more space. or try this layout. you may have enough room to walk behind the other sofa in front of the doors. (if you could bump out that wall another 6' or so, it would be perfect!