I wonder if you should look into this a lot further. I find it hard to believe that you can't sell a house in the kind of location you describe, walk away, and find a nice place maybe in one of the more peripheral areas, that will meet your requirements, give you cash in hand, and not touch your $100,000 nest egg. No, you certainly wouldn't end up in the inner city but you could end up in a situation that provides the facilities you need and gives you a financial cushion. That said, my real concern would be how to make this house workable for boarders while preserving your privacy. I think you need to provide a floor plan of what you have for anyone to make anything approaching informed advice.

I love the colours you suggest and they would really make the corner pop. Make it personal. Be brave. Options; Wall mounted boxes or floating shelves to display some colourful treasures above toddler height. Pinterest search 'Wall display Boxes" The next 2 sound a bit hippie but you can do them with your toddler and if they get pulled down noone gets hurt. - Fabric collage on a sore bought canvas with pieces of velvet, satin, silk in your favourite colours. Finding some vintage fabrics or op shop clothes to cut up is a cheap activity and add you can even add some bling or go with a geometric art deco style.Again Pinterest has great images. - Patchwork quilt style wall hanging eg.https://www.instagram.com/jenkingwell/?hl=en

This is a gorgeous reno, my favourite this year.

I wonder what your plan is for the front lounge. It is a long way from the other living spaces in the house - is it intended to be a kind of "snug" for the adults (being next to the master bedroom)? If so that might work, but it otherwise seems a bit of wasted space that won't get used compared with the main entertaining spaces at the back of the house