I'd try to keep the laundry on an outside wall because of dryer venting.

Today I actually looked at the vinyl luxury tiles that are grouted. Didn't think I would ever consider those but the more I learn about them, the more I think it may be the way to go. Wouldn't have to pull up my existing tile and it's very durable with a lifetime warranty. It mimics natural stone including slate, and it's warm on the feet. I'm actually looking at the Armstrong Alterna Reserve stone. It is expensive, but the cost will be offset by not having to pull up old tile. Does anyone have experience with this?

here is my initial idea. Instead of removing the entire wall, I would leave some wall and create a approx. 6' doorway. I also, would keep the hallway 4' wide. I think it will look better and may hide stuff like dirty laundry and other stuff. I would put the craft table to the entire length of the left wall along the window. It will be normal table height - 30". the dryer is close enough to the exterior wall to be vent out that way (under the craft table and the out). I think you have more than enough space for everything that you want. This U-shape is one option. Good luck with your reno. here are few pictures of inspiration

Depends on your budget... if you don’t want to spend a lot - choose regular wood door and hang them as bi-fold. if you want something nice and durable ask for custom modern doors. Here are photos what we made for laundry closet in comparable sizes as yours. I do not say that this frosted glass design will work good for your classic kitchen interior, but just the idea. Instead of glass you can choose says laminate panels that are similar to your kitchen cabinets.