Analysis first, then plan, as Tookoo recommends. Use native plants, as neotoma recommends. Get specific plant recommendations locally, as Terri & sgelade recommend. Here is my two cents worth, for the shortterm. a. Remove and stockpile the lawn edging and most of the mulch back against the fences. b. Take a can of spray paint, or a bundle of surveyor's flag, and mark the largest circular or curved form that will fit within the fenced areas, no matter where the trees stand (inside or outside of the line) to form the temporary edge of your lawn area. See if the entire family agrees on the alignment or just do what looks best to you as the Senior Gardener. c. Add the wood edging to the new edge, or, it will look a lot better if the edge is not visible, using a steel edge whose top edge is down just above the grass roots and no longer visible, and not an impediment to the lawn mower. (when you form the plant beds, you will dig down a couple inches at the edge, where it meets the steel, and then slope the bed up from there, and the mulch will be contained at the level of the lawn, beyond) My recommendation, after you call in your landscape advisor, is to fill the beds totally with ground cover, beneath the shrubs, so no mulch will be seen after the two years of plant growth, using only a finer textured mulch which will become part of the soil bed. (Maybe the bark mulch will smell good in your new fire pit, along with the wood edging.) d. Plant the entire area with grass seed or sod and enjoy the beauty. The curved edge will make the space appear and feel larger and will decrease the maintenance of the smaller bed areas. On the subject of tree placement: analyse first, then plan. Look at all the views beyond your fenceline from all windows of the house, the living/ dining areas, all the bedrooms, to enhance the good views and to block the big, the bad, and the ugly. The large trees on your list will block views from the upper windows, The small horizontally branched trees will be a piece of sculpture in your downstairs view throughout the year, while their flowering and fragrance yet another reason to be alive. For instance, if you have an attractive small tree that has attractive flowers and foliage, PLUS has attractive bark color and has a sculptural quality in the off-season, you won't have to visit the museum quite as often, with a sculpture garden right out your window.

Ok, so I gather its south facing so the wall gets the northern sun. It looks like the wall is low so the neighbours can look in (& visa versa). Possibly some trelace that goes above the fence planted with a vine (there are number). This would give the two windows an outlook. Many herbs would also grow well so possibly a vertical garden with a watering system. Paving or another hard surface would be better as grass would be hard to grow. Its a great space, you could even use some French doors from the dining room with potted palms for that tropical feel (also helps with the cross flow ventilation in summer) add some bench seating maybe a fire pit for winter. Its hard without seeing the property in total but hope you can draw some inspiration from all the comments & have fun :)

I'd suggest framing it out and using it as a window seat. A carpenter could get that done in half a day. Anchor the frame to the wall, get a custom cushion made and fill it with some cushions and you have a beautiful space to read. Bonus is the minimal cost.

hi could be over watering, stick your finger in say 5cms if it is moist dont water, only water when you feel the soil is dry , they like to be moist but not wet, the stems seem to be rotting due to being constantly soggy, you could always take problem leaves and stem for advice from a nursery, but I would definitely hold back on the water, good luck.