The above idea is good, or you could get some cardboard boxes, cut them to the right dimensions, tape them together and lay them out where the furniture would go (I am better with three dimensions than 2 when it comes to figuring out what works! )

There is no one size fits all for family houses, but here is what I have observed. The first things you need are a decent sized family bathroom, and a decent sized laundry. Never underestimate the laundry size! Small children always want to be near you, so a playroom will just be a toy storage room. By the time they get to primary school and start having homework they need to be near you to do it. They also still enjoy being where you are. By the time they start to be more independent their bedrooms will be their sanctuary, so a larger size with plenty of storage will be more useful. Two living areas is ideal, but not essential. The main one will be where the family gathers to do whatever takes their fancy, where you will find all the toys and activities. Set up some desks for activities/homework etc. The other would be useful for a grown up sanctuary (the good room!!!) - this is the one that is not essential. So looking at your plan in my opinion, I would ditch the activity area and pay more attention to a bigger bathroom and laundry, and bigger bedrooms if that is an option.

Please post measurements of the room. Where are the doors and windows?

some dimensions are inconsistent ..please check measurements for all rooms including bathroom, laundry, toilet, cellar and retreat and what is the height of the space under the stairs?.. without at least 2m headroom the cellar can only be used for storage unless you are prepared to rearrange plumbing and do you mean that you want the kitchen and casual dining to be reversed but what about the old kitchen window and what are the walls and floors built out of?