how do you want to use it?
sit out?
BBQ with friends?
just look out of the window at it?
grow veg?
That will dictate quite a lot.
Overall, I would be tempted to level it, put down the black sheeting stuff, and a load of gravel, and then plant a few key plants through the gravel, eg a some lavender, a rosemary bush etc.
and create a sitting area.
Maybe grow a clematis up the fence.
perhaps keep a bed to the right, and fill it with veg, if you like veg.
Where does the path go to? do you need to keep it?
It would all be much easier if you could water, although once established most plants should be fine, you would need to water veg
best way to level is just get a spade and do 1 hour at a time, shifting the soil from back corner and spreading it over the rest. That should get it level enough to put down some flags for seating etc