Even though that is a fairly small space you could put some decorative trellises just in front of the fence with some ever flowering vines on them. Install a paver patio between them and the windows you hope to transform into doors.. You could also have the wisteria trained onto a pergola that would create a little shade for the patio as well. Some beautiful potted specimens/flowers and a couple of attractive outdoor chairs and you would have created a beautiful "picture" to act as a focus to the room. Additionally you have extra space for entertaining. Obviously the reason the previous owner obscured the window was because there wasn't much to look at. By creating a "view," you change the dynamic of the room as well as getting the light you want. Actual light will brighten the room like no change of floor would.

It's been a while so I'm sure you've finished your renovation. Show us some images of the end result!

A couple thoughts. a) This appears to have been placed at the center of the back of the yard, for something that is not a central activity. Consider moving it to a less dominant location, and perhaps filter the view of it from the house with some small trees or multistem shrubs like crape myrtle or lilac, that will also provide a pleasant fragrance. b) This design is like a council fire of the boy scouts, perhaps for telling ghost stories or instructions for the days to follow. You want cozy, cuddle by the fire, arm around your neighbor environment. A place for a quiet conversation, like with corner seating. Or with loud, slap on the back joking around, therefore closeness. A useful space, with or without the fire. Great place to sit with the dog and read that mystery you have been putting off. I think the gravel floor might be the most suitable to all activities, even for the kids parking their bikes there while they toss a ball around. You might want to place a horse shoe court next to it, so they could use the same benches from the other side to watch the contest or the fire - might need a refrigerator handy for the beer. Analyse first, then plan. Enjoy!

I'd consider wider block of wood (sleeper for rustic or smooth sleeper for contemporary) as an upright at various positions - rather than a solid backing (uneven number) then add cushions of all sizes - that way you can arrange them however you like and change the tone for the season. Still having places to lean but not blocking the whole back of the seating. OR like the image below with bright cushions, have a cushion with an attached roll at the back - If the seating area you've built is deep. Rgds Jac