In our old house we had drywalled stairs save for the bottom 2-3 steps with a rail on one side. I always meant to have solar tubes put in but never got around to it. It was low priority since no one spends any time on the stairs, they are just a passthrough. But a bright stairwell is nice if you can do it. In our current home, it is also a drywalled stairwell, with a half, slanted wall at the first four steps on both sides...painted trim on top. We could probably open it up another 4-5 steps but it’s not worth it. Fortunately there is a big window just to the left of the stairwell at the top, so it is not dark like the last house. I agree that if you don’t need the wall space to keep it as open as possible.

Another option might simply be to get rid of the bayed portion of the breakfast nook. Square it off level with the two posts on opposite walls. And then, perhaps, construct a bookshelf across the width of the nook, facing the sunroom. You could place a bench for seating on the kitchen side of it. It would eliminate the need for a railing, preserve the idea of a nook for the kitchen, and provide a functional barrier (book case) between the rooms without ruining the view.

Agree with JAN MOYER about the potential for some of your potential choices to be a lawsuit waiting to happen -- and not just children but elderly and clumsy adults that should know better. Consider adding a bookcase with glass doors facing the upstairs to serve as a pony wall and a curio cabinet for your family treasures. You could adapt upscale stock overhead kitchen cabinets for the purpose and add white wainscoting to the back. For the rails beside the actual steps, you want to make sure the rails meet local building codes. The objective is usually to be sure that a child cannot get their head stuck in the railing. https://www.pinterest.com/pin/712131759805717495/ I suggest glass front doors. Not only will there be less dusting but what you display doesn't need to be as neat ... you can literally fill the cabinet with family treasures and move the content about to put your seasonal items out front during the appropriate season.

A familiar list! We just finished an overhead sewer, and driveway widening had to happen early on to allow for dumpster delivery/egress of other large vehicles. We also moved our old servant stairs. They were incredibly steep and narrow, and caused our kitchen to be divided into four parts. We shifted them to a corner of the house, and shuffled flour plans from basement to the third floor to accommodate them. I wouldn’t recommend something that drastic unless it gave you dramatically new options, but for us the third floor with its old servants’ kitchen and three small bedrooms was a terrible use of space, and it made sense to turn the kitchen from four small spaces (butler’s pantry, cooking area, pantry area, breakfast area) that circled a staircase into a cohesive kitchen that is designed for the family to cook in versus a servant’s domain the family wouldn’t have ventured into. At least, I hope it will be 🤞 We demo’ed in July and I’m still probably at least six months away from a functional kitchen again. Are you living in the house through your updates?