The thing that would make the kitchen function better would be to recess the fridge into the current pantry area and put a pantry where the fridge is. All of the traffic into and out of the fridge walks right through your prep zone and will be annoying as all get out. You don't have enough room to add the peninsula unless you give up seating in the nook and take it over for additional kitchen. Adding a peninsula would encroach on it's already too small space.

I agree with GreenDesigns. Also, if you moved the sink and DW to the opposite wall, and put the stove and pantry on what is now the sink wall, you'd have slightly more counter space for prep beside the sink. (Unless you need to keep the stove where it is for venting.)

If you're not interested in moving everything in the kitchen, you might consider a movable table, 2x4, 3x5, whatever size will work for you, that could be parked opposite the eating nook, against the end of the cabinet, and powder room wall.

It could be pulled forward to act as the peninsula that you mention, or pushed over by the stove. When not in use for prep, it could be used a buffet service for the eating nook, or for the family room, for entertaining. The powder room wall could be built out, so that the cart isn't visible from the family room, if you want more of a separation.

You can also post your questions on the Kitchen forum, linked below. Welcome to GardenWeb!

Here is a link that might be useful: GW Kitchens

Thanks for the replies!

I realized I failed to note that the breakfast nook is bumped out 2 foot from the floorplan on this particular house. I don't know if that would make expanding the counters more feasible?

I will post the question in the Kitchen Forum. :)