Since the lot you describe is smaller than my open living area, I would suggest looking at some of the "shotgun" house plans around New Orleans,LA. I think you can build up and back and get an interesting home with a loft for space. It can be done, A porch with an entry to a narrow hall at the back might work best for you. Will you plan a courtyard (closed)? or what? What part of the country are you in? What are your local codes?

Most regions have their own prevailing construction methods and materials that are common and customary to that region. It may be driven by the available raw materials, local labor and their experience with a certain type of construction, and the cost of labor to build. Other factors that drive the different type of construction can be pressures from the environment and climate conditions. One can create recesses in masonry or stone walls but there may be structural weaknesses that become a factor or just more complicated construction that becomes involved. Building recesses in heavy masonry walls verses light stick framed walls can be equally possible. Reducing the thickness of a wall can also affect the insulation capabilities of that wall as well as the structure.

There is a specialty lighting store near me that I am going to soon with photos to work on lighting at my house. I will show them your photo and see if they have an idea. Probably won't be till Fri or Sat but will get back to you.

I think kitchen and eating area should be next to each other and kitchen should be near or next to an entry for ease in putting away food stuff. The sitting area should be near an outside view to add relaxed vibe to area and the TV should be opposite sofa for easy viewing.....sometimes necessary to move the TV and rewire accordingly. Good luck.