I'm glad you say crating at night and during day is not an option and are looking for suggestions.
I like your idea of gating off the kitchen....so much better than a crate.
A few things I would do: make sure you leave the crate in the kitchen with them, with the door open. This will help the transition as they likely view their crate as a safe place. Do you have a cloud nine bed yet from The Yorkie Haven rescue? It is soooo comfortable...something like this will make their new area comfy. I assume you have tile of some sort in the kitchen, I would get a blanket or washable rug for them. A tile floor can be cold and uncomfortable for little bodies. Add lots of fun toys. Also, make sure it is dog safe...no cords or cleaning products or even people food within reach.
If you completely eliminate the crating during the day, the transition into the crate at night will likely go better.
I highly recommend getting someone to come once a day to walk the dogs during the day. The anticipation for the walk, the walk itself, and the winding down after the walk will benefit so much. They will have a MUCH improved daytime life and will be more likely to sleep at night. Especially if you walk both of them in the evening and play with them like you already do.
This is a wonderful opportunity to really do something good for your dogs! Good luck and keep us posted!