Backyard Oasis... but how?!

Below is a picture of my backyard.

Oh, wait.  Sorry about that.  That was a picture of what I wish my backyard looked like.  Below is a picture of my real backyard.

 I mean... those two pictures almost look the same.  It's easy to see how I could have gotten them mixed up.  Here's some more picture of said "backyard."

It's not much, but it's the most backyard we've ever had and I am stoked about it.  As you can see, we have half dirt half concrete.  As the weather warms up, I've got big plans for my backyard.  The problem is I have too many plans for too little space.  I am driving myself crazy trying to decide what to do with what little room we have.

In the past my blog has acted as a kind of life counselor.  I come to you guys with my problems.  You help me solve them and find a place of inner peace.  When I said my milk supply was getting low you came to my rescue.  When I asked you what to do about my non sleeping baby you knew the answers.  When I asked where to find good jeans after baby you did not disappoint.

So now I give you my latest problem to solve.  Your counsel, wisdom, and advice is most welcome.

I love to be outside and I want my backyard to be a place where we can really enjoy our beautiful summer nights.  I like to be outside no matter what, but I need something to entice Greg a little bit as he generally prefers to be inside.  June (and future children) will also be spending time outside so it needs to be friendly to them as well.

Options for the dirt:
#1:  Put grass in.
pros:  Maverick loves grass and so does June.  Grass would help keep the backyard and house cooler
cons: there is no irrigation system so we'd have to water the grass with a hose.  We'd also have to get a lawn mower just for that itty bitty space.  It is possible Maverick would just poo all over the grass and ruin it anyway.

#2:  Fire pit.
pros:  This is probably the best way to ensure Greg will want to spend time outside. Great for hosting friends on summer nights (especially when June goes to bed). It wouldn't matter where Maverick went to the bathroom
cons:  Our backyard would consist mostly of dirt and rocks.  June wouldn't be able to crawl around and play.

#3:  Grow boxes/ garden and trees
pros:  I really really really want a vegetable garden.  The vegetation outside would help keep the home cooler.  We'd have fresh vegetables in the summer.  I would enjoy spending time outside gardening.  A tree would give shade.
cons: Nowhere for June to play, I have no idea how to plant anything.

Option #4: Sandbox, slide, or something more kid friendly

pros: I can let kids go outside and play, becomes almost an extra bedroom in our home in the summers

cons: Our backyard is sacrificed for kids and it doesn't become the outdoor oasis I want it to be.

Options for the concrete:

#1:  A table to eat outside.

pros: we could eat dinner outside!

cons: would we really eat outside?

#2: Hanging bed/ hammock
pros: I could go out there to read, makes the backyard seem more enjoyable and welcome, a little oasis
cons: seems trick to make (I am not a DIYer), would a bed hanging over concrete just be really hot and miserable?

Option #3:
Outdoor lights and couches.  (I know you don't call your outdoor relaxing furniture couches but I can't think of what else to call it!)

Option #4:  Put grow boxes on pavement to free up the dirt for fire pit or grass?!

I have given you everything that is in my head.  Now tell me what to do!  Or is there anything you have had in your backyard that you have really loved?