I tried to create a big new space for all needs. I kept the existing furnitures with new locations and added new storage cabinets and a laundry room. Sliding doors and cabinet doors are prefered to save more areas. Also you can keep sliding doors open to live in bigger areas and work in larger room. Bedrooms are located warmer side of building and livingroom and kitchen are located through terrace wall. I suggest new stylish fireplace rather then a pellet heating so you will have a new focus point in living space. New kitchen location will fix the mechanical / plumbing problem you had. Privacy of bedrooms are considered so I keep their terrace connection seperate. Light modern finishes are preferred. Existing cabinets and closet doors should be paint white. Other wooden pieces should be polished again and saved their original colors.