Today, things are looking a bit better as I walked around and took some shots. I purchased some natural hardwood mulch, and mixed it with twice-mowed leaves from the woods; and lightly mulched around Area 3. It held the water better, and the soil actually looks a bit healthier already.
I also added some Annuals around the trees, mainly for aesthetics from the street, but also to help retain some moisture while I decide what to do in this grass area. I just hope I can get beyond this area this summer and get to work on the woods!
Everything that I’ve planted in flower beds n this area suffered from the walnut trees. The Woodland Phlox gives me great hope!