If there was enough money, you could build here with a basement and overhang. That way, you would have a semi-covered terrace with an adjoining green strip for at least 3 blades of grass, comfortable children's room sizes, and a set-back with 3 rooms.
Something like this:
Please only consider the old-fashioned fences, cars, and furniture as mental aids. The kitchen could possibly be planned even more openly with an island, if desired.
I don't think the building line on the street is so bad after all, if everyone really does it. A quiet play street where the children's rooms meet in front and the parents call from the kitchen for dinner – that has something quaint and I can easily imagine it if you get along well with the neighbors.