Thank you for reaching out. 

That is a really large area to cover. My suggestion to you would be to first do a  soil test. Then it would need to amended according to the suggestions from the soil test or by adding compost to the area. I would seed or sod - whatever you want to do.  Both are gonna take a lot more water than you realize. I would seed/sodalong the curb up to where the Pine needles are in the picture and do from the garage all the way back and to curb.  It will take a lot of watering, but I think it's way too big of an area for you to put plants in, especially if you can't get out and weed like it would need to be done. It would take a lot of care. As far as under the pine tree, you could plant hostas, ferns, lily of the valley. All of those are ground covers and will fill in the area overtime, especially the ferns and the lily of the valley. Lily of the valley is poisonous to young kids and animals that maybe would eat it. Something to consider. As far as the Pine needles- they are good mulch, and really don't affect the soil that much. It's more the roots that leach both water and the nutrients to make the soil acidic. But they can be used as mulch.

If you go to extension.mn.edu and search for soil test you will find out how to submit a sample to the U of M. 

Another option is always to call a landscaper to get their opinion.

I hope this helps!

You're welcome!