I think we are going to use the white subway tile to keep the budget down as I priced new tiles and it would blow out the budget. Really like the contrast grout idea to add a bit of texture and pattern. My partner is a builder and he loves the reclaimed wood shelf idea as we have a lot of spear old wood left over from the renovation. We have made a dinning table and fire place mantel from it already so it would tie in really well.

I agree with you the pillars are unfortunate. The replacement tiles will stand out no matter how close they come to matching so you're better off making sure they are clearly different so the gray one is better. Putting busy mosaic tiles could look nice but will interrupt the flow between rooms which I'm guessing is your problem with the columns in the first place. You will need to create a dextrous solution to tying into the 2x4 wall on the left side but I think it can be done tastefully- maybe beveling it back once you get past he end of that wall.

Beautiful clean modern kitchen! You have a great opportunity to put your personal stamp on the space with a unique backsplash. As you've heard already there are some different approaches. I'd probably place the backsplash up to the wall cabinets and up to the base of the hood. Then continue the backsplash at the same height (18"?) behind the sink. Then place an inspiring colorful picture above the sink to break up the wall. Here's a picture with pendants that aren't too obtrusive. Having multiple levels of lighting at different lumens makes a more inviting feel to the space. I couldn't decipher your flooring, but you may also want to consider adding some nature elements like a type of wood flooring, wood stools, etc. Good luck! If you need software to plan out materials check out our Home Designer software: http://www.homedesignersoftware.com/

Might I suggest a more contemporary picture frame mantel with mosaic stone tile between that and your firebox? Love the near craftsman window shapes flanking the fire wall . . . use the height on both sides, / shallow shelves on one side can visually frame a swing arm for your television and give real storage on the other side.