I'm a bit older than you, but similar size and shape (5'3" 8 stone), although a bit more hourglass (more defined waist, bigger boobs). I also have long legs, short waist for my height, so I know firsthand that putting on weight around your middle has a big effect on how you feel and how clothes fit.
For starters, I'd say, you look great and, while I am advocating being realistic - you are just not going to look the way you did at 25 - I don't think it would take much for you to feel happy.
In terms of exercise, you say you walk a lot - do you mean incidental walking or fast walking aimed at raising your heart rate and burning calories? I'd aim for some of that, plus start with some wall sits and planks - three or four reps of 30 seconds each and build from there. If possible, add in a couple ten minute bursts of fast walking during your day (build up to wearing a weight vest). A couple pilates sessions a week will strengthen your core and glutes and do wonders for your resting posture. Weights are a good idea as you age, but I don't think you want to go overboard, adding too many new things at once or it will feel overwhelming.
That said, I've never counted calories or fasted, but I think I would starve to death on your diet. Are you hungry? Do you feel like your energy flags during the day? As you get older, I'm a big advocate of eating for skin, hair and bone health. It's much more appealing to have glowing skin and thick hair than it is to be stick thin. I think you need more healthy fats, high quality whole grain fibre and protein. I'm not a big breakfast eater (and I do eat plenty of fruit) but I think a breakfast without any fats or protein isn't doing you any favours - I'd add in some of both. Do you eat eggs, olive oil, nuts, avocados, dark chocolate, anything fermented?
I do agree it's a good idea to get a bone density test at menopause. Are you on HRT?