There's a lot of reading in this thread, and I tried to get through it all. But please pardon me if I missed something and am repeating here or offering a suggestion already shot down. Are you familiar with Sarah Suzanka's books? NOt-so-big house concept? One of the points she makes is that people keep adding on to houses thinking that more space will solve the problem they're having, when it isn't the lack of space that's the issue, but the way the space is used. 10 years or so ago, I took that to heart when I wanted to add a master suite and a family room. After a lot of soul searching, I realized that we weren't using the space we had effectively. We had a living room that was almost always empty. And that when folks were in it, I was almost always far off in the kitchen. You say you're a traditionalist, so this may not work for you, but I urge you to give it some hard thought. Do you live the kind of lifestyle that requires a large formal living room? Someplace where you entertain adults regularly or where if someone were to come by the house for a meeting...insurance discussion, lawyer, etc....you would not want them to see your family room? Either because it's a mess or because you're just a more formal person? If so, stop reading. But if not, consider this: Convert your current living room into the family room and open it up to the kitchen by taking out the awkward powder room. You'll be near the kids and you'll have a large comfortable space for the whole famiy to hang out. If you have a play room downstairs (spend some of the money you'll save by not needing a new foundation to do really good waterproofing job...proper drainage and grading, sump pump, etc.) That can be where the truly noisy, rough stuff goes on. Then close off the current family room and turn it into a quiet, adult haven. Make it a library/living room...someplace you and hubby can go for peace and quiet or an older child (and they will get older) can quietly do homework. Put your masterbedroom suite, as planned over the top and save yourself the foundation costs. You can also use the room, if necessary as an emergency guest room with some creative furniture (a murphy bed? built-in daybed/window seat?) Or you might even think about putting a small private stair case from the adult living room to your bedroom. I'd try to fit a powder room off the family room or kitchen somewhere...if no where else, carve out part of that laundry room. It isn't optimum, since kids coming from the back yard would track all the way across the family room to get there...but it wouldn't be bad. And when you design that upstairs master bedroom DO consider sneaking at least a stackable w/d up there. Right now, a first floor laundry is a god send, cause your kids are little and you need to be close by all the time. But by the time the 2 year olds are in school, you'll be able to do the laundry when they're gone. And by the time they're teens, they can do it themselves. And believe me, the only thing better than a first floor laundry room is a laundry on the same floor as the dirty bedlinens and smelly boy socks. No more hauling baskets up and down the stairs. Of course, the idea of expanding out onto the deck to connect kitchen and family room accomplishes much of the same goals...a separate adult space and an integrated family living space and kitchen. But I don't know if you need to go to that expense, frankly. FWIW....

The only thing I would sit there to do is write out bills, file, and shred. I removed the desk area from the kitchen because it became a landing spot for too much stuff. I usually sit at the kitchen table to write bills, but I'm not gonna shred or file there, so I'd rather it be in one place. I won't be there for very long. Hopefully. I guess I need to put a pretty picture hanging there to look at just in case! I rarely ever print anything, so the printer is at my son's desk for his school work. I'll keep the lap top in the pantry/office, and try to persuade DH to return it there if he's out and about with it. Good luck, I know. I prefer to have a chair there not only to file and shred with my bad back, but also to have a place to sit and take off wet boots/shoes. This photo was my inspiration, but they have more space at 6 ft wide. Mine is only 47" wide for the table/desk area including the depth of the pantries that are 15". So I'm only gonna have 32" for desk area, but the counter will have a niche area 15" deep running into corner next to pantries. The counter will be 47".

I really don't see the first floor so to analyze the overall plan is difficult for me to do... With all the space upstairs there should be no reason not to incorporate individual bathrooms/ wet area for each bedroom just take the unfinished space and make it wet area... and enlarge bedroom 2. I'd love to work with you in your pre planning phase... let me know if I can be of any service. www.msdg.design

Remodel for YOURSELF. Not resale. Because if you are remodeling for resale, you’ll lose money, as all remodels do, and lose the pleasure of living in a personalized home both. Designing for the generic future buyer is like grandma’s living room, with the plastic covered sofas. No one is allowed to sit on them without the plastic, and you never ever feel comfortable in there anyway. Everything is preserved and untouched, just in case the mayor schedules a state visit. That fantasy “better” life in your head doesn’t happen. It’s the tiny enclosed back porch with the card table and ragged old sofa and new 60” TV on top of the dead console TV below where LIFE takes place. The baby learns to crawl on that threadbare indoor outdoor carpet, and the new puppy pees on it. Pay attention to how you really live. Not how you hope you’ll live after Samantha wiggles her nose and the project is magically completed, and your bank accounts are unmagically overdrawn. Also do a lot more research on how huge construction costs have gotten, and plan as minimal changes as possible. Paying for good design in advance let’s you spend your dollars more wisely. But only if you are ruthless with yourself in analyzing needs and wants. “We’ll only do this once, so while we're at it.....” kills your budget. Absolutely kills it. https://www.remodeling.hw.net/cost-vs-value/2019/