Yes to removing that cabinet. Tile to the ceiling might look a little funky around those windows. Since there is no functional reason for backsplash up there, unless you couldn't notice it because it was so plain and the same color as the wall paint, it's just a little odd. Maybe stop the backsplash between the windows using trim (metal or pencils) at the bottom trim of the window. I would also remove the valances and use something a little more modern. Good luck with your update.

Yes remove it and just tile below the windows

I would definitely remove the cabinet. Wouldn’t tile all the way

so the tile backsplash on the outside of both of those windows will go up to the cabinets that are there...what if I bring the backsplash tile here up to the same level (bottom of this cabinet that is being removed) and then put a couple of small open shelves in that area (maybe a couple of small plants on them or something other than plan painted wall?)?

and yes I will finally throw out the stupid valences :)

Tile between the windows up to the same height as the bottom of the other cabinets. Do not add shelves. Leave the area uncluttered.

Yes remove the wall cabinet and tuple to the ceilumg and around the windows. Adding some lights above the windows can make a nice look.

Yes, would remove that wall cabinet. Would keep the top of the backsplash tiles between the windows the same height as the other cabinets --

Alternately, stop at the bottom of the windows if you plan to leave off window treatment and might consider adding art between the windows.

https://www.greatbigcanvas.com/view/sage-branch-i,2441727/?gclid=EAIaIQobChMIq4PbspqI8AIVBYrICh1guwDQEAQYBSABEgJnyvD_BwE

https://www.greatbigcanvas.com/view/standing-tall-iii,2441802/?gclid=EAIaIQobChMIq4PbspqI8AIVBYrICh1guwDQEAQYBiABEgIgyPD_BwE

Between the windows might be a good place to hang a usable cast iron trivet collection on a tall narrow vertical wood board. Useful art.

https://www.google.com/search?q=interesting+shaped+colorful+cast+iron+trivets&tbm=isch&ved=2ahUKEwimsJuTm4jwAhVJm-AKHeHjAUIQ2-cCegQIABAA&oq=interesting+shaped+colorful+cast+iron+trivets&gs_lcp=CgNpbWcQDFC7WlidYWCKdmgAcAB4AIABc4gBhQWSAQM1LjKYAQCgAQGqAQtnd3Mtd2l6LWltZ8ABAQ&sclient=img&ei=El58YKbfAsm2ggfhx4eQBA&bih=620&biw=1349&client=firefox-b-1-d

Or you could use that space for a magnetic knife and/or kitchen tool holder:

https://hmmagnets.com/product/10-inch-knife-holder-wall/?utm_source=Google%20Shopping&utm_campaign=Feed1%20Test&utm_medium=cpc&utm_term=2535&gclid=EAIaIQobChMI26qhlJyI8AIVj-azCh28FglrEAQYASABEgLhOfD_BwE

Perhaps the cabinet now between the windows could be repurposed to another room or in a garage or basement? If not, consider donating the cabinet and valances and any other usable items you remove but don't want to use elsewhere to a Habitat for Humanity Restore Store.

I agree with Lisa. Remove and tile all the way up and around.
It’s a personal choice. I suggest you look at pictures of fully tiled walls to get an idea. You could even do a few wood shelves once u remove that lone cabinet.

here's one that stopped level w/cabs. to me, it looks unfinished. to others, it might be perfect. your choice

similar to your layout. I like the shelves in the middle. this would have look better w/the tile all the way up.

Wouldn't throw out the valances. If you don't wash and store them, consider donating them to a local charity thrift store that supports a cause of which you approve. The pattern on them is really attractive even if the valences themselves may be out of date. You could even cut them in squares and do a slip stitch hem all the way around them to use them for cloth napkins.

Do let us know how your project turns out.

Granite counters will make an amazing difference. I would also use the granite for the backsplashe to the window trim only on this wall.
Show us the other walls, please.

Yes, I would also suggest removing that single cabinet and the valances. You could put a couple of shelves there if you have something to display. The valances make the windows look like droopy, sleepy eyes. If you want a touch of fabric in the kitchen, hang a single valance above the windows to allow more light in. If you need to control sunlight, a pair of bamboo or grass cloth Roman shades or roll-up shades may work there: they allow you to see outside but let in some light.

Definitely take down the cabinet. It seems line tiling to the ceiling would work with the feel of your kitchen/house, but hard to tell from this one picture. Could you post another photo from a wider angle? There is no right or wrong answer, this is a purely aesthestic decision.