How do I replace existing overhead fluorescent fixture ?

https://www.younghouselove.com/lights-ceiling-action/

https://www.google.com/search?q=replace+fluorescent+light+with+pendant&tbm=isch&tbo=u&source=univ&sa=X&ved=2ahUKEwi89Iq_pLfeAhXSm-AKHYZ5AfwQsAR6BAgEEAE&biw=1536&bih=740

My house was built in 86. I took the whole mess down and replaced with another fixture. Unfortunately in my kitchen with only 8' ceiling height, so flush mount was necessary. Am I thrilled with what I have now? Eh? It's ok, but with 8' ceilings, there isn't much wiggle room without dumping hundreds if not thousands into reworking the entire ceiling. I just wanted light so I could see. This is a dump in the dessert, not worth the investment. Chances are, your house is worth it. Get an electrician in and do it up right. Good listing is essential.

Depending on the type of lights your talking about, would it look better if you framed the lights in with wood of your choice.

We are removing the fixture, building a small profile decorative box (over the island) and using 3 hanging pendants

It's fluorescent.

check out Pinterest they have awesome ideas -tried sending pic but failed..

It does not matter that the fixture is florescent. The box in the ceiling should wire up the same way. I would keep the inset and treat as a tray ceiling. If you only need one light, two of the boxes can be removed but I would get an electrician for the rewire because it will be tricky as all three are connected to one switch. If you want to hang three pendants it should be pretty simple for an electrician.

Take it all down, drywall then paint. Pretty easy DIY