You should be able to do three panels in those windows up into that arch with horizontal louvers and fully functional. Your shutter maker just needs to line vertical posts up where you have vertical mullions! giving that center shutter something to hinge to. Here are a couple of similar windows I have done. It's a partial arch but it's the same concept with yours

We have installed indoor shutters for the neatness of the finish and the privacy they provide. They have helped with the westerly afternoon heat and sun up to a point. We installed an external drop of sand coloured shade cloth, attached just under the guttering ( it has evenly spaced hooks that catch the bottom edge to the house wall about 50cm under the window sills) along a continuous north facing window that was letting in a huge amount of summer heat despite the deep eaves. That was a DIY temporary thing until we rebuilt that part of the house but I think I might look at replicating it when we do that job next year. It has made a huge difference in the heat and glare but doesn't stop us seeing into the garden. We can roll it up neatly in winter.

answering your questions: change the sliding door to a bench height sliding window and use the salvaged sliding door in the western end of the dining room where the best entry position is for the deck, you MUST have a proper legal drains do not consider anything else...the drain pipe for the garage laundry can be on top of the concrete floor, behind the washing machine and through the sink cabinet and/or under built in storage and only needs a few cms not a whole floor and no stepped up area that you would see or trip over.. the laundry can't be in a separate room as there's not enough space for a separate laundry without compromising the size of the garage...a laundry cupboard 80 cm deep is enough for the washing machine (allowing for the drainage pipe) you could use the old line cupboard to store anything you want but it's not cost effective to change, the entry foyer is already as big as in many modern homes and there's generous flatpac biw space in the small study.... the family bathroom is 2380 x 2370 (ie the old study minus 1m for hall way and wall thickness and, arranged exactly as shown to allow for the wide window there should be space for a bath up to 1800 x 750, vanity about 1200 x 500 and shower space 1200 x 800 and leftover space makes the small linen cupboard with the door deliberately opening towards the shower to use the back of the door for hanging racks for towels and clothes....btw i understood your priority was maximizing separate sleeping rooms and minimising costs...my last plan has five separate sleeping rooms plus the lounge with sofa bed totalling sleeping places for at least 10 people plus the potential for bunks in the garage so you need to decide what is most important and where you're prepared to compromise

my suggestion are based on the fact that mum and dad are usually at the house alone and aims for simple two person accommodation that can be rearranged to suit a crowd...the kitchen cabinets are the only fixed objects in the room and include a tall pantry, base cabinets and/or drawers with open shelves and wall cabinets and space for several people to work side by side with a small extendable dining table, two chairs and a bench seat (also used as a place for newspaper and lamp etc behind the recliners)...a patio with big table for outdoor eating under the shade of the tree with extra bench seats that can also be used inside... there's space for a small divan or night and day lounge with a wall hung tv and the corner bedroom door allows for much better circulation space in both the living and bedrooms with preferably a sliding glass door for indoor outdoor connection with or without the original front door and, based on the size of king single beds, there's no other arrangement that would allow both beds to have a view to the lake and there's just enough space for a biw, small desk and two chairs