OK, so my friends used a gajillion dump trucks worth of fill to achieve this on their once-sloped yard, but their setting and home remind me a bit of yours. maybe their yard can inspire you a little?

https://www.houzz.com/magazine/houzz-tour-virginia-wine-country-cottage-stsetivw-vs~521801

You can go far enough out on your slope so the vertical distance from the ground at your existing terrace and the slope is 3' or less. There are lots of retaining wall systems you can DIY there at the 3' limit and backfill to level a larger area. You might take in dirt when someone excavates for a pool, for instance - contact the pool contractors in your area and offer to take dirt for them as spring comes. you can also borrow the dirt from your own land further out.

Once you make a larger flat area, treat the area where it slopes off from it with some thoughtful planters surrounding 6-10 wide / 4' deep "stairs" . Your leveling above will make the transition area a bit more steep . . so use this area for kitchen garden / raised beds that you sit at from the terrace side and walk up to from the bottom. The slope between should be stairs and on the outside edges you can use groundcover or plant more edibles. Then you'll always have herbs near the kitchen. The stairs will be large and wide enough to provide more seating or even be a play stage with audience arrayed below.

Consider shade and where you want it when you plant trees. Deciduous trees are wonderful in colder climates as they give shade only in the summer and then provide architecture but no leaves for allowing winter sun in . . .

Think of the land as a series of "rooms" with functions. The larger flat area will allow you to provide a dining terrace behind the grill area and expand your seating where you have the french doors. Your dining area might benefit from a pergola / open frame / trellis above that eventually you grow some lovely pole beans up on. . .