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

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

oh old post to practice, the obvious choice is first floor extention but this only if the ground foundation on the back supports for this floor. Its mirroring the outer wall of the ground floor so enough area, there also alternative option of cantilever steel beams or concrete floor slab for first floor side extention though maybe need additional permit . Bedroom 3 will slightly Bigger than original, Plan A Plan B - Very Narrow Hallway Plan C - With Cantilever

I hope I am assuming correctly from the window placement that this house is detached? Maybe its a bit simplistic but swapping the kitchen with the reception room and extending into the left corner would give you a floorplan closer to what you had. You could also open up the wall between the dining room and the current reception room which would give you a decent sized kitchen diner. It would be good to see a floorplan of upstairs too. There is no question that there is less floorspace than where you were before. You will probably need a downstairs WC too maybe the current utility room?