Salem
So if I read your diagram correctly, you already have an island that mostly has 34" separation from the counters. So already you know what it is like to use that kind of space with a 34" separation. So that should help decide n that number.
What I miss on your diagram is the depth of the old island; your new one is labeled as 37" deep I believe, and the pic shows the old one that deep as well. I just want to certain that you are allowing for 16-20" of space in front of each person that may be seated at the island. By having seating there you lose the prep/serving/storage space on that side of the island. You have a much longer island, and more counter top space as well, so that concern may all be negligible.
Our experience re seating in the kitchen - related but not exactly an island:
In our kitchen we replaced the traditional oval dining type table in the 'eat-in section' with a bar height table against the wall. We do find that people (both guests and family) do congregate in the kitchen at times and that the new bar height seating is much more inviting and more used than the old chairs (around the table) were.