I would suggest you take out the cabinet that is to the right of the stove and use it elsewhere in the house -- perhaps in the bathroom or dining room with a hutch above it. Then, I would suggest you have someone install a lazy susan cabinet in the corner between the sink counter and the stove, meaning you would move the stove down a bit and have a small cabinet/counter top to the right of the stove. I would suggest you have the cabinets refinished in white and then paint the walls a pastel you like. If you would prefer white walls, then add white-painted crown molding and paint the ceiling a light neutral blue, such as Sherwin Williams Niagara Falls Blue. Then, I would suggest you choose a favorite accent color and use this sparingly in accessories like towels, pot holders, small vases or floral arrangements, and a valence above the triple windows. For a genuine 1940s look, you might have white ceramic square tiles with a rectangular red border installed as a back splash behind and above the stove. If you are replacing counter tops, I would suggest a light color such as white with a beige or light grey vein or striation for some sort of pattern. You might be able to find the same color and design in floor tile OR opt for a wood floor as another poster suggested.

kitchen has wood look lino not sure what to do in lounge? as you can see from pxt it steps up to lounge, do I follow on with lino or would that be too cold here in nz?

Well done, what an improvement!

Thanks for your comments everyone. We've taken your advice (Luke and NH) and changed the island to a rectangle (1200 x 3000). We lose one breakfast bar seat but gain storage and dining room space plus it shortens the distances from the island to the cooktops. It also removes the need for a corner carousel. We're much happier with this result. Dairy_maid, we've done what you suggested and walked through some common tasks. Overall it works reasonably well although we may keep some coffee spoons and butter knives in the scullery drawers for morning toast and coffee. We've also invested in a "silent" rangehood which has the motor on the outside of the house behind the fridge and we've upgraded the scullery sink to one that is 600 x 400 (internal size). Fabrication starts tomorrow. Woohoo. Once again, thanks so much for taking the time to respond. The design has been significantly improved with your input.