What direction does the back entrance face? What room does the door enter? Do your want the area for relaxing (ie patio and shade) or just more appeal?

The walk is charming. I would think a patio from the same pavers with a pergola-type shelter (if shade is necessary) supported by columns matching the front entrance would be nice. Then colorful gardens, or a kitchen garden adjacent.

I does appear that the grade needs correction away from your home. A patio with correct stone base will solve the situation as your siding is already close to the ground.

Here's our back entrance and flanking gardens.

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I'd lose the window and back entry door and put in some double patio or french doors that lead out to a covered deck.

To answer fnmroberts questions:
Faces south, door opens into family room and just more appeal.

I think I have might have confused everyone with the term rear entrance. It is really an entrance on the side of the house not the back. The pictures marked "rear" were taken from the driveway. The back of the house has a set of patio doors and another window.

Thanks again for the recommendations so far.