I like the clarity of the design and the relaxed implementation of the wishes.
Dirt from children in the living room? Every townhouse resident knows this and manages quite well with it. (According to the crime scene cleaner: "Dirt is just matter in the wrong place." Then a durable floor is installed, such as bamboo parquet or tiles.
Kitchen not directly on the terrace? With some imagination, you can give the kitchen a garden access, if necessary with a few steps and a small herb garden next to it.
Upstairs hallway too big - maybe. However, you can still need storage space in this house. The hallway is suitable for this. Put wardrobes in.
Rooms upstairs not generously wide but by no means "tubular."
With which construction method should the house be built?