Thanks Dave! How did you design that?

Lots of possibilities for a cozy space. Here are some ideas - 1) Power wash the retaining wall and use it as the backdrop for your focal point. 2) Plant a row of evergreen shrubs along the top fence, and plant a row of lower perennials & annuals in front of the shrubs to cascade over the wall for visual interest/seasonal color. Keep it neat with plenty of bark mulch. Perhaps add evergreens along the side fence. 3) Regrade the yard so it's level and grass over where the bricks were, and everywhere else. Looks like you have enough hard-space. 4) Plant a sturdy ground cover under the trees if grass cannot grow there - vinca, pachysandra. Perhaps build a planter ring around the trees with the bricks and plant shade annuals. 5) Add your water feature as the focal point centered at the base of the wall (small waterfall, fountain, or semi-circular koy pond). Maybe use the bricks to build this. 6) Gazebo could overpower this yard - instead maybe consider an airy pergola that extends out a few feet from your doorway and plant with flowering vines. Send pix once completed! Have fun!

I am not a landscape architect, so don't take this for professional advice. It seems like you need fencing along the top of the retaining wall if you have concerns about kids falling off. Using something you can see through like wrought iron, chain link, or thin wire fencing would help preserve your view. You probably could do something 3-4ft tall instead of 6ft to help minimize the impact on the view. Beyond that, I'd remove that old diving board. Then figure out where you want seating areas like the fire pit you describe. Design patios and plantings around that. If you want something more comprehensive, you probably will need to enlist a landscape architect or designer. Or try your hand at planning out a design on some paper and maybe you can get some feedback from experts here.

The pros will want more pictures as well as dimensions to give you advice! Also Houzz has a lot of outdoor space photos that you can use for inspo!