Hi Renai, there are a couple of things about the kitchen that trouble me. To me in some ways it looks like a hybrid of 1990's kitchens and the current direction design is taking. The L-shaped return looks like it has a breakfast bar, but so does the island bench - a duality that does the kitchen no favours. I would ditch the L- return. This achieves a number of things: 1 - It facilitates better traffic flow between the kitchen and dining room; 2- it eliminates the awkward corner cupboard, always a problem that none of the many high tech "solutions" address adequately; 3 - it simplifies the construction of the kitchen, with potential savings; I would move the island bench up the page (possibly even make it longer), providing a free wall for tall storage cabinets, and or alternative fridge location. The door to the walk in pantry would need to move slightly to best achieve this. The corner location where you have the fridge now is not good for one main reason: you will often need to open fridge doors up wider than 90° to pull out drawers and shelves for cleaning, and even at 90° most modern fridge doors require more space than just the fridge recess allows.

with such limited wall space i would not remove chimney or change any windows as you need structure to support the roof and somewhere to place a TV and wall storage (eg books, music, dinnerware, glasses, computer equipment, pantry supplies etc etc) and with careful demolition the inside of the chimney could provide essential kitchen storage space as well as room for a new built in heater and a TV wall ... windows in the old dining area appear to be ideal height for a study nook (but too low for kitchen counters) place dining table in the living room with floor space for kids toys, use old dining area for study nook and storage wall, a long narrow island provides counter, under bench storage and island seating, add sliding doors out to the new deck in the old laundry porch and, with four to get ready in the mornings, i've included a double vanity with space for linen storage and mirror doored wall cabinet for toiletries, there's a generous shower and separate powder room with integral basin as already suggested

This takes space from both front bedrooms and passage if wanted, as in a small house this is wasted space. Retaining both fire places. With the rear stepping down a Nib wall would open up that space to the kitchen family/living. This also places all living space on the warmer side of the house. The depth of your block suggests a possible sub division with access from the rear laneway or you could one day replace the extension with a bigger area, With any alterations in a Federation house you will need to consider the patterned ceilings cheers

The house is detached from the back yard because it is on a different level. I would extend a deck out into yard, then steps down to yard. Dining becomes bedroom, so bedrooms are all grouped together. Living become new ensuite and master bedroom. Open up walls on all rooms on the right. Obviously there will be load bearing walls, so you may need to keep part of walls. A good architect can make them a feature. The front is north, so having the living, kitchen and dining opened up to the front would be beneficial. Then flowing onto the new deck into your yard. The second living would stay as the rumpus room. But, what is the house made of? Internal bricks or timber. What are the floors made of? Concrete or timber. What is your budget? Yes there is potential to change floor plan, but does your budget equal the expense?