LVT would get my vote. Easy to clean and you can use a steam mop on it too.

We had our bedroom floor done 3 years, it’s about 27sqm. It only cost c1k but we didn’t need sound insulation. The guy was an antique furniture restorer who started refurbishing floors as a sideline and i suspect he seriously undercharged us..We also didn’t need much in terms of repair work, all boards were sound and only 1 had been replaced at some point in its lifetime, you may also find holes where central heating has been installed or gaps under skirting etc i think you need to consider whether you’d be happy with all the dents as pine is such a soft wood. We hung new curtains days after the floor being done and the ladder (sat on a towel) created dents. We put furniture pads under everything but have had no need to move the furniture since but i suspect it has big dents everywhere! It's fine for us jn a bedroom but not sure if i could cope in a living space

If you made outer wall then its okay to build window on the side, your neighbor privacy will be maintained and you can get the sunlight needed, I would advise to move the garage to the front so it can be accessible for a car from the main road, you can still have direct path to the garden from the front if you move the enterance to the right and just put a fence, if it were me here's the layout i will do, it'll give more space for closet, bigger bath, utility room, and additional storage unit, so basically move the wall to the left and focus buildng that side, the previous garage will become the new master bedroom with en-suite

That could work, thank you!