This is probably a lesson in how NOT to create a prototypical observation car interior but it was the approach I took using much of the same raw material you had. That includes the K-Line interior assembly although this one was actually used in a Lionel car based on K-Line tooling, which is part of the 6-31755 MKT Texas Special set (21" aluminum body cars).
Here is the original assembly after I started work on it, mainly trying to fill the innumerable holes in the floor that are typical of K-Line's assemblies:
As you will see below, eventually I gave up trying to smooth out the floor and put a "carpet" over it instead.
The car itself was a beauty of a streamliner; few pictures survive and this is the only one in color I have found:
The stock interior is in fact nothing like the arrangement in the prototype, which was a 2-1 bedroom/buffet/lounge. To start with I only found this sketch plan but later on tracked down the blueprints:
The detailed plans come from Randall & Anderson's Official Pullman-Standard Library, vol. 15 on the Western Railroads. Here's the lounge seating area as designed:
As you will note, there is no half-circle bar in this arrangement. I thought seriously about modeling the interior as built but I found very few photo records of it and I decided that (a) I wanted to keep the bar and (2) modeling the original would be too time-consuming. (I was dead wrong about the latter.) The interior images were either very grainy or were, I eventually surmised, probably of the Frisco observation car and not the MKT:
So this is where the whole scheme I built turned into a fantasy, starting with the bar but eventually including everything else and especially the passengers:
The Tiffany lamps shown above are LED-illuminated. They are in the smoking section of the car; the other two sections are (a) drinking and (b) stud poker/art appreciation (I told you it's a fantasy scheme). I'm particularly fond of the party passengers shown below; I swear that I tried gluing the blonde in an upright posture and she tipped over and set in the posture you see (the goldfish bowl came later so she'd have something to ponder):
Here is the completed rebuild and the car on the rails, which given the lighting features I added glows away like a Christmas tree when powered up:
I also LED-illuminated the drumhead, marker lights and the tail light. From the blueprints it emerged that the tail light was in fact a red Mars light and I added a simulator module to duplicate that.
Incidentally, the "Cascade" car you have a cutaway drawing of appears to have been typical of a number of Southern Pacific tavern and lounge cars. I have thought about modeling this one, which is the Shasta Daylight "Timberline" car:
I think that the Cascade was part of a 3-car articulated set. Some years ago Golden Gate Depot made a version of one of the single tavern/lounge cars which I have and as you can see below the area where the bar is does not have windows:
The interior is otherwise prototypical in terms of seating but the area where the bar would be is just blanked off and it would be difficult to see the bar if I tried putting one in. Unlike GGD cars, K-Line and Lionel did not go in for prototypical window placements but I don't mind that.