Is this West Elm sofa the kind of thing you are looking for? Or even lower to the ground? http://www.westelm.com/products/4227534/?catalogId=52&bnrid=3918508&cm_ven=Google_PLA&cm_cat=furniture&cm_pla=Sofas_+_Sectionals&cm_ite=West_Elm_Baxter_Sectional_Sofa_Cotton-Rayon_Ikat_Print_Feather&adtype=placi_src=17588969&ci_sku=4227534&ci_kw=%7Bkeyword%7D

You have some good ideas but if you're going to sell soon and aren't planning on taking the soffit out, I would just do some minor changes and keep the cabinets (just add a couple cabinets). I wouldn't move the sink but just get a nice stainless steel sink and update faucet. I'd get a stainless stove vent. Remove the wall on the left of the refrigerator but then just do a small pull out pantry on the right of the refrigerator. And, put a cabinet above the refrigerator and make it look built in. A glass backsplash, can lights on the ceiling and pendants above the penninsula. I think a raised counter will make the kitchen/room feel smaller.

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.

A very simple layout keeping the floor space within the kitchen, the WIP takes up a lot of space with not much gain, The broom cupboard could be moved to the Laundry/entrance, narrow. If the wall has been bumped out to the eaves on the deck side giving an extra 300 depth to the kitchen you could make the island 2700 x 1200 and all drawers. The wall of narrow pantry will hold all pantry needs and more, no deep cupboards to dig into. cheers