Too, your plan looks very choppy - I'd try to open it up and remove walls rather than add them.

Need a whole lot more info to properly advise you. Are you planning to rent second floor? Why do you want to separate living room? Need transportation between first floor spaces. What will be Main entry? What are local codes you will need to comply with. You need a architect to help you through these wickets or you will have a big problem. Find some architect, not a draftsperson, but a licensed person who is knowledgeable of codes and regulations that will affect your plan.

This kind of alteration really requires an architect and a good contractor. The architect will know all the local requirements and how to meet code on everything. You will want/need to insulate the ceilings of the downstairs for sound/fire control, separate the electrical and plumbing lines, and all the things the average homeowner doesn't know or hasn't thought of. In the long run, an architect will save you money. Your friends who have remodeled may refer you to their architects. It's worth interviewing two or three in your home to see which one can help you achieve the best result.

Definitely interview and talk to referrals the architect gives you, but also ask those for others they know. Always good to go one step deeper. Can't be too careful.

Thanks for your inputs. I will definitely consult an architect to take this forward.