I wouldn't drywall over the window. Take a look at the options for recycled brick, they may match better than you think.

If you are seeking a truly open feel to the floor plan you have shared, then using one material in the mail living area is the best approach to making this space feel truly open. Using a variety of materials on flooring chops up the space and decreases the visual footprint. I would suggest using wood, tile, or if you are on a tight budget laminated flooring for the living/dining/kitchen. Then use carpet in the more intimate spaces; bedrooms and possibly hallway. Save the tile for the bathrooms.

Unless buying custom manufactured wood cabinets, you are buying a series of boxes. A 100k euro kitchen installation of an Italian kitchen is one example from my portfolio. Differences are found in the hardware, the door/drawer pulls, weight of doors and exterior finishes. It is about the design, first. In our region, you can knock off 1200-2000 just be sticking with a full depth fridge--but it is design that will make it possible to install full depth and get a counter depth effect. In the Garden Oaks Fine Accommodation residential display suite I needed to prove that a high-end design can be executed for less. Again, it is design that does the trick. The owner of the kitchen above loves the pendants over the breakfast counter. I did not have the heart to reveal the price--$19 each. That owner likes/needs bling so the 14k euro chandeliers (2) in the foyer are a feature. But we get more comments on our pendants--because they are integral to the overall design. Real estate agents have pegged this kitchen at anywhere from 45-75k. It cost under 30k. DYI projects offer the opportunity to take the time that you might not otherwise allow to a designer (hence our need to come equipped with knowledge, contacts and suppliers that augment our services). I recommend drawing from images (Houzz is great for that) to start, then researching suppliers, collecting specs, and developing a document that covers all aspects of the kitchen from lifestyle needs to style to comparisons of product reviews. Whittle it down to an instruction for purchase and installation. Consider challenges such as the dreadful corner cabinet turntable and splurge on solutions that make your design truly functional. You'll appreciate the expense that delivers practical functionality. There are remarkable solutions for the corner cabinet--but my fav is to determine whether that space can become storage (cabinet or drawers) in an adjoining room. When not practical, articulated pull-out stainless shelves are functional--and cool. Undermounted sinks are great for clean-line counters. Well placed recessed lighting (design again) eliminates the need for other fixtures--and allows you free rein to purchase for focal point impact or (my preference) to fit seamlesly into the overall look. Enjoy the journey--have fun!

Thanks for the replies! My wife suggested we talk to a local real estate agent, so i think that is a good idea... just that Im not sure how helpful they are likely to be if we arent selling yet :) As for saving for our dream house, I dont disagree, however if doing this up nicely over the next ~5 years or so while we live here nets us some extra in the eventual sale, then that of course will help us as well. Interesting thing happened today actually. I got a knock on the door and one of the older neighbours asked if he could take some lemons from the tree. I of course said yes. Anyway he was telling me he had lived in the street for 40 years. I asked him if the house had always looked like this, and he said no that ~30 years ago the old old owner did a massive renovation and pulled off the timber and put up the bricks and gutted the inside of the house. Interesting stuff!