Also have a dual purpose room. We did inexpensive white shelving units around two walls, with fabric boxes to stash stuff, (office, and my "crafty" supplies), threw in a few decorative items. Got a tall basket for rolled up mats/foam roller storage, a complementary lower basket to throw in the requisite elastic bands, small hand weights, etc. Decorated walls with pics from our travels, framed with colored mats.

I love your idea of extending, but understand your concerns re over-capitalisation. I think your budget will need to reflect how long you plan to stay in the house, and whether you consider the enhancements to your lifestyle as valuable an investment as the actual financial cost vs possible capital gain. Have you thought of getting in a real estate agent to discuss what effect any potential extensions or changes will have on the value of the property? I agree with MB above that the laundry is under-utilised space, and using the entry space would also be a very cost-effective solution. A way to really modernise the home with less expense than a large extension and new ensuite bathroom would be to close off the door between the existing bathroom and toilet and add a toilet to what would now be the master ensuite. The laundry and current toilet could become the family bathroom, and the kitchen could be extended very slightly by pushing out the exterior wall to create a scullery with back door, which could be closed off from the kitchen with a cavity slider. If you pushed out the laundry/bathroom wall to match, you could add a bath, too. Best of luck.

practicallity wise with young kids shaggy is going to be a nightmare ..wool is good as warm in Winter..and hypoallergenic.. Harvey Norman have great rug sales sometimes 40% off just keep an eye out for them.. I don't buy wool I just buy what looks nice and is practical.. 2 of my kids have eczema and they find wool rugs rough and itchy..we used to have a wool rug at our old place..so I only buy synthetic now..

There certainly can be legitimate functional reasons/purpose for basins to be required set appropriately in relation to the wall to suit the selected wall spout setup, and having experience with similar details the spout length chosen can determine the basin position and does need to be a certain length to work properly. Sometimes this requires adjustment of basin size and bench depth. In this case something's clearly happened.....without understanding the company's particular processes my guess is that the bench depth larger than what it should be. It's your home/investment, you have to live with it long term. IMO what differentiates (great from ordinary) builders is their capacity to resolve issues and shoulder responsibility when something like this occurs. Believe me they (should) have enough fat built in the profit margins to resolve these types of issues. The good news is you actually have a physical example you can refer to in the company's display home. If required go and measure it and compare it to yours to be 100% sure - in custom/boutique situations clients don't have that luxury/back-up check. Try not to play or get drawn into a "blame" game, or accept lame excuses (which the industry is expert in ;) ), it doesn't matter exactly how it went wrong, the main thing is you want to get it right/resolved. Stick to your guns ;)