You're RIGHT about the dinette being UNCOMFORTABLE!
Looks like it might
be doable, but A LOT of work!
The biggest problem is the hot water heater.
Pull the pad then the board to get a good idea of what you're up against.
Look online for the measurements for a tankless water heater then get the measurements for wall huggers.
The water pipes could be rerun after the install.
Have you thought about leaving the front bench and installing 1 recliner, get the adapters to turn the driving chairs or one of these, very comfy.
looks like it would fit behind the drivers chair.