I also like the current floor plan best of your previous suggestions. Whether it will be a reading nook in the upper floor or a sewing spot, I would just decide spontaneously. My 3 boys loved it when I turned on the sewing machine – unfortunately back then still in the dining room. Their excited "renrenren" was always so sweet and everyone wanted to watch. The only downside was that I always had to clear the dining table again in the evening. Now I hardly sew anymore because the boys are long past the age where they wear self-sewn clothes. I even have a large workroom now, but thanks to 2 PCs with accessories, a piano, and bookshelves, there is unfortunately no space left. So years ago I would have wished for such a corner where something could be left lying around, and now I just carry everything to the dining table and back again when I sew or mend something for myself.
An idea for the stair railing. Instead of a banister in the upper floor hallway, we installed cabinets – with a baseboard 95 cm high and 50 cm deep. All the bed linen, towels, and supplies for the bathrooms are stored there. That saves space in the other rooms. Perhaps you could fit cabinets with a depth of 30 cm there. We have considerably more space than you do, but maybe you can still make use of the idea.