"... plastic stones out to the curb and line it with lights ..." There wouldn't be any way anyone could comment on this idea without seeing the entire path of which you speak. The close-up picture cannot explain the context. "Read a book" and "have friends over" definitely sound like a patio. We have no idea of your budget but since you're renting, you'll want to be conservative. Fairly economical is some patio stones on a sand base. Dirt cheap is an old, discarded carpet. Sometimes it's used right side up; sometimes upside down. The place to start is by creating a PLAN ... a drawing (to scale) that shows the existing major features (house footprint, walks, drives, tree trunks, etc) on which you'll add the proposed landscape features ... any paths, patio, planting, etc. Usually one would draw a base plan (showing existing features) and then make copies or use tracing paper on which to work out possible solutions for the various desired elements. The latter is usually an evolving trial and error process. When you come up with something that works, it gets added to the plan. It looks like there's a lot shade in the back yard which is good for relaxation & lounging. You'll want to do some clean up (pruning) before getting started on the plan and assessment of existing conditions in order to make sure that what you plan will work. If you post the base plan here, viewers will be in a better position to understand what you're working with and able to make better suggestions.

Hi Terracing on a slope can be done to give different useful areas. Here is one of the projects we did with the lower level being a firepit area and the upper level being synthetic lawn. With the last photo being the before. There are ways to make the walls look more natural by using a different type of block or growing plant material on them. From the plant material it looks like you live in california. (I see a bougnavillea). If you are in Los Angeles area and would like to talk about a project feel free to look at my profile and give me a call.

I like the idea of a pergola too. If you cantilever it off the wall, you can avoid having a post in your walkway. Make it deeper and use it as a shaded living area. There are lots of possibilities for that wall in addition to the ones already mentioned - an outdoor kitchen, a place for lounge chairs or a group of chairs around a propane fire pit... You mentioned the area where the salt bags are placed is the optimal place for sunbathing so are you saying you'd like to fit lounge chairs there? Your seating looks to be pretty far off of your retaining walls, if you wedged the grouping closer to the door and retaining walls, it would open up and maximize the largest part of the hardscape plus create a path so you can place some lounge chairs by the pool and then slide them back toward the retaining wall in the cold season. You did a great job on the remodel, especially your stairs.

Hi everyone, I forgot to mention that we need a small shed also. Where should we place it? Thanks!