It kinda looks like a breakfast nook to me. I would either put in a small round table and some chairs or make it a reading area with 2comfy chairs and a table between them.

Thanks, I was thinking the same thing. Problem is there is a dinning room by the other end of the kitchen. So I dont see the need of two areas for eating?

I have an area right off my kitchen that was set up by the previous owners as a breakfast nook. Like you, we have another dining area near by. I thought it looked silly to have 2 tables within view of each other so we furnished it as a sitting area. We use it all the time.
This is how it looked prior to our kitchen remodel:

And this is how we have it furnished now

I think the key is to find some comfy chairs. The chairs we have now are swivel gliders and everyone that sits in them comments on how great they are. When we remodeled, we switched out the previous chandelier fixture for a semi flush mount ( not visible in the second picture) so no one would bang their head on it as they sometimes did before. You might want to do that too in your space.
Good luck in finding the right solution for you.

Yep...sitting room...
Club chairs are my favorite! For reading and chillin!

Badger gal, that looks wonderful - who makes the chairs? We got a swivel chair along with our new sectional and it's already a favorite.

The chairs are Bradington Young's Marietta Club chair. Their web site shows the chair in leather. They have fabric options too or you can do customers own material. We did the COM option and were extremely pleased. They did perfect pattern matching on the chairs and made the chairs identical twins. My DH is an above average size guy and the chairs are plenty roomy for him. He never passes up an opportunity to sit in those chairs and watch me work in the kitchen. :)

Can you post a couple of photos from other angles and the dimensions? You could maybe get a small love seat in there or a rounded love seat? I imagine a couple of small chairs and a small table (maybe even a coffee table) would look great!

heidihausfrau nailed it. The square tile in the floor says to me "place a table here!"

She's changing to dark wood floors.