DIY knife block - glue together the covers of some interesting books at the thrift store and secure them with twine. The tight pages of the books hold the knives in place. Plus at 4 dollars total cost, easily affordable when the books start to shred.
If we decide to put a breakfast bar sticking out from the wall between the windows.something like this could work, perhaps with two stools stored on the kitchen side? Couch against the back of it, facing the TV on the solid wall?