When designing an outdoor space you should treat it just as you would an indoor space. Create yourself an actual outdoor living and/or dining room. Be sure to include seating, pillows, linens, lighting and decorative accessories. Using an outdoor area rug can help to ground and define the space. You can change up the accessories and linens depending on the season or holiday. Have fun with it! I've included a few pictures to help you get inspired.
(Photo 1 - sueswink.tumblr.com, Photo 2 - Hutch Interiors, Photo 3 - cozyandlovely.tumblr.com)