Ozbern: we had a similar dilemma, lovely backyard and then they started tearing down bungalows and building four story townhouses all around us. I built a single depth pergola along the back property line, the beauty of this is not only the privacy, but it brings the scale of the yard down to make it feel more intimate when we are outside. We also added a 10' x 10' (little over three meters) pergola right up against the house where we had a wall of windows. Will try to find that photo too. We have coral vine now growing in it. Dies in winter, comes back in spring. You can always do more contemporary details if this is too casual.

We had a landscaper come in and draw a plan. Re-used the whole bricks into a grid pattern, and filled the squares with concrete. This summer's job is to build the bench seats around the outside for a seating area. The flat surface has been great for our children - they learned to ride their bikes out here, and love decorating it :-)

I would clean up first. Especially the stuff growing in the paving. Then get gardening with pot plants and start experimenting with different plants and the positions. See what you like and if you can keep it alive! Our house has the sun setting over the back fence and we've done a few inexpensive things to reduce that issue (most expensive were outdoor blinds around the verandah) but for most of the year we just don't want to be out there. It is hard work to keep the plants going in summer, there is a lot of sand due to the difficulty in keeping lawn alive and it is just bloody hot. So, that's why I'm saying clean up, start gardening small and see how you go before committing to structures that might not address the real issues you have with the yard. Just my 2 cents! :)

You could lay a nice curved shape garden by the corner of fence and plant layers starting with 2-3 mtr trees at back down to 50-70 cm high plants at front. This will soften the fence line and give you something to look at while on the slab. Something for the kids also like a small structure to play in, on and around would complete a nice family back yard. If you are handy you can make you own small play ground copying parts of a local ground or there are kit sets available. Good luck,