Will there be something along the wall on the other side in the kitchen? If not why not turn the window into a full opening ( a pretty easy thing to do ) so you'll have potentially even more light and a new flow pattern. Otherwise remove the window and replace it with a sheet of glass in a simple surround - you could have the glass frosted along the bottom half to obscure any view of dirty dishes or cluttered countertops.

I got stuck with an internal window against my better judgment but have just now put in second from the kitchen to the dining room where a door was too much, must say I think part of losing the old restrictive/proscriptive ways of ruling design, I love both of mine and would recommend

I had a 60's bungalow with these windows and needed to remove one when combining a bathroom and loo. In my opinion simply boarding over the frame would look a mess. To do the job properly I had to carefully remove the old brittle glass. Cut back the frame and create a rebate. Insert an additional stud, board over and skim with plaster. It's quite a fiddle but the materials are cheap if you have the tools and time. I employed a plasterer for skimming. I would strongly advise leaving things as they are, changing the glass if you prefer and spending your money elsewhere. If your other half can't live with the transom windows, and looking at your photos I would remove glass and frames, insert additional studs, board and skim. You could then extend the cornice right round the room but you might have to move the loft hatch over too. If you are considering altering your stairs your balustrade doesn't look like it would pass current building regulations. For child safety you must not be able to pass a tennis ball through any of the gaps. You don't have to change it but most professionals would want any upgrade to meet current regulations. Good luck with your new house.

With the lovely big rooms and aspect its a great flat. I think you can improve on the inevitable carving up for facilities. I would look at moving the shower room into the bedroom. I’m wondering if you can get the plumbing for the wc under the stairs, perhaps raising the new shower room with a step? I would move the bedroom door too in time but this will i suspect involve beams to support the stairs above. The bed could face the window and wardrobes along the hall wall. Squaring up the kitchen definitely, perhaps with a peninsula island? You could also increase the size of the WC as suggested without detracting from the seating arrangements imo, unless you were planning on having a dining table….an orangery dining room off the kitchen would be icing on the cake if funds ever allowed.