Here is another picture from a different angle.

This is a little closer view

I think we need more info to be helpful.

Ages and number of children?
What type of activities do you plan out side? (anything from sunbathing, to ping pong, dining, ....etc etc)
Do you want a water feature? Fireplace?
Where are you? Climate?
What colors do you like.

Off the top of my head, Id want some umbrellas for sun protection. Id want an area to eat/grill that is closest to the kitchen. Id want a conversation area with chaises.

Pretty space. More questions. Do you grill? Where is your kitchen access?

ML

O.K. -- just for a quick start:

a)Outdoor Kitchen: Place a large grilling area under the arbor -- think about adding a large outdoor table in front of area -- to act as a prep area for the food. Other ideas might be to add a small outdoor fridge or large cooler (make sure it has a way to drain) Add lights for night-time grilling.

b)Then create a dining area in the round space in front of the arbor -- adding a round table or even two -- with umbrellas.

c)Add a curved outdoor sectional and additional chairs in the upper round area -- that is your seating/entertaining area.

d) Add sturdy outdoor storage under the top deck area -- for cushions etc.

c)Add lighting along the whole deck and stairway -- for safety at night ....

We used furniture from OW Lee, we can get high winds so we went with the heavier wrought iron furniture. They have great fabric choices. The furniture is made in CA ... I try to buy local/US made as much as possible.

Here is a link that might be useful: OW Lee outdoor furniture

wow, really pretty! Some comments which might help --

1) Don't feel like you have to rush and get everything all "done" --
2) Think function first -- what types of activities and usages are important to you? (play places, dining places, places which you need to look pretty from inside)
3) Containers are great at first because you can move them if the first placement isn't right
4) Swings are always fun!
5) The weather in your area also affects what you put there; for instance, is that pergola essential for shade in the summer? If so, put your main seating area under there
6) Do you need to plant around it now for privacy, wind break, or other needs?

I'll try to answer as many questions as possible;

Children are grown - currently adult entertaining, mostly sitting drinking wine! maybe grandkids someday

Thinking about a fountain on bottom section near the entry to backyard - may be down the road for a fireplace

Pergola mostly for shade. Want a nice view when looking out window, so I'd rather not put the grill there.

Very windy and open. Only 1 neighbor, very large backyard so privacy not an issue. More issue of sun and wind

We thought a swing under deck instead of storage area.

We won't have an outside "kitchen" for now, just a grill.

Pretty open to most colors. May do more splashes of color because of sunlight may fade furniture cushions.