I don’t think it’s that bad, but it will be "compact." Therefore, definitely draw on graph paper and move the furniture back and forth. That helps tremendously to uncover tight spots.
A few half-baked ideas:
Kitchen in the sofa corner. Then swap the WC and storage room and turn the storage room into a pantry. That would enlarge the kitchen and put it in a good relationship with the dining table in the southwest. Also, then the living room and bedroom of the granny flat would be adjacent, which could allow for a possible passage later on. Possibly, the WC could also be given a shower.
Washing machine & dryer in the utility room would give the small bathroom upstairs more options. Or redesign the large bathroom to be used by three people (one child can manage that, and a teenager could possibly also use the lower bathroom (if there is – see above – a shower). Considering the small space, that would be a compromise worth considering.
Gable roof (possibly asymmetrical?) instead of hip roof would fit the design much better. Possibly a knee wall of about 1.8m with an open roof truss to make the roof’s exterior flatter.
Definitely NOT (!!!) a garage. That would be way too bulky for the house. I like the idea from with a (airy) carport and a roof pulled toward the house wall.
Regarding the granny flat: how much rent does it bring in? Is it really worth it? And "the residents," meaning plural? In the small apartment? You might have tenant turnover there.