If you can, converting the entire garage might be an option as well if you don't use the full space. Garage conversions are tricky because the building rarely has all the "stuff" needed to make it a living space. All the retrofitting is expensive and time consuming. Lifting the roof and adding a living space above the garage is an option so long as the structure and the footings can handle it.

Remember: the concrete poured to create a garage floor is different to a "slab" in a living space. The builders rarely use moisture mitigation in a garage floor which means there is plenty of 'wet' issues in this space. Whether the whole garage is converted or just the upper level (you have to add on a few feet to get a second story on it), you will have to have something done with the slab. Venting has to be amazing because of CO emissions from vehicles, etc.

It might be easier to turn the garage into a new space and build another garage than it is to lift the roof and add on an upper living space to the garage. You would have to work with an architect on this one to make sure everything that needs to be done is done.

Find a good local contractor. I'm sure when they look at the place, they'll think of great things.

That looks like a decent-sized house. How are you using the second floor? Without seeing the layout, it's hard to judge, but two smaller dormers flanking the main dormer might make the rooms more usable.

Beautiful property, lovely house! It looks as though you have the space and it might obviate structural issues if you converted the garage and built another garage. We look forward to seeing the finished product or at least hearing about your decision after you have spoken with an architect and/or engineer.

Renovate, don't move and enjoy the evolution of your home! Now you need a good designer, contractor and possibly an architect.

Now you've found your 'bonus room'! Whatever wall shares plumbing that might be your bathroom... good 'luck'...

Just a thought:

If you build a room on the back (right) side of your garage (atop your sidewalk), it could serve as a second living space and a bedroom and bathroom could be built above it and the garage. Don't even try to add plumbing to a garage with a concrete floor, have the supply and drain lines come up through the walls of the new living room. You could make three sides of the new living space almost entirely window walls, creating a sunroom. If the double windows to the left of the back entry could become patio doors from which to enter the sun room, all the better.