It looks to be the underside of a beautiful hardwood timber floor. It might be wise to consider whether a new ceiling with insulation for that upper floor is needed in winter. All white would look good for a crisp finish & some colour on the wall. I personally would look at the area as a whole project & what look you are after. It may be that to make it look finished against the house that some boxing around the top of the pillars & a flat panel roof (could be grooved timber panels that come in large sheets ready for staining or painting) will make it neat & finished.

Love the 80' house, because you have a lot of sun to deal with a pergola from just above the front door running along the garage wall (minus the furniture) you could set a clear roof on top of the slats for shelter from rain. could even consider a similar pergola at a lower level running across from the front entrance and above the two front windows, these can be built to help block summer sun. Maybe render the garage wall to break up the brick and paint same as the garage door and timber above, this looks pale beige /grey, then this colour above windows remembering that window and door frames are cream, they can be painted. please keep the 80's door celebrate it.

best decision would be to incorporate any changes for the entry with the upstairs renovation .please post photo of the new upstairs and roof and what do you plan for the front yard, fence and driveway?

It's not a must do. I think that the current sconce is a little too ornate/federation style for your lovely house. (Is it thirties/forties era?). Noone else is going to much notice it though, it's black, not overly large and definitely not offensive. So if you hate it, then it's probably worth doing, otherwise I'd leave it. The alternatives you picked out would definitely be more true to your house. Maybe no. 3?