Can you remove it to add more space to the bedroom, take doors off and make a display shelves with TV if you like to watch in bed? Or dressing table, bit hard without photos and plans

I think you should explore the idea of getting a Pod on the deck. its like a mini granny flat / cabana with toilet and small multi purpose room. You might have the space for this. Your layout looks fine as it is, and if you have a covered pergola, a second toilet in a pod will works well there. I am a bit against adding plumbing and moving walls to your house. First its a mess. lots of putting pipes under the flooring, fixing the flooring again, also ceiling and conrice works, and you end up with smaller bed, tighter layout. Too much sacrifice and not too much to gain.

you need to identify the best location for upstairs windows and views and, with such a large space, you could have a giant dressing room with wardrobes or use the extra space as a separate retreat and have biw in the bedrooms but we need to know what you can see out all four sides and which is the preferred view and what do you want to see from outside at the front and the local climate and suitable insulation and window location will determine the best comfort levels upstairs... pending more advice something like this could work for upstairs and although you said that you didn't want biw the easiest way to use the space and provide generous out of sight storage is the twin wiw and there's still lots of space for generous bedroom with sitting area, a small foyer with a set down space and the grand entry at the top of the stairs and have to suggest a separate toilet for downstairs but can't read the dimensions to offer some specific ideas but any special reason why the downstairs bedrooms appear to be such different sizes? ..it's not obvious from the plans although it does say existing living and portico but where do the new rooms begin?

If this is to be your forever home, I would suggest to convert the bedroom 4, with the existing ensuite and shed, into a master suite. If your boys are 6 and 8 years old, they will soon be 13 and 15 and you won’t want to share a bathroom with them, and you would not want them to access your bedroom unannounced through the bathroom! Totally renovate the bathroom into what you require for the boys and guests. Totally renovate the bed 4, ensuite and shed into your master suite. Look to the future use, as it will be here before you know it. Don’t renovate for what you need now renovate for what is needed in the future, as in this build environment it may take longer to be completed than anticipated.