I would think you would be better off using the office as the office and bedroom 2 as the guest room. The reason I say this is because if you use the office as a guest room, guests will have to make their way up the stairs to use the shower as there is no shower on the first floor.

That is a good point. We will be using our office more often than have guests over, which is why we wanted to use Bedroom 2 as our office (and so we could take advantage of the awesome terrace!).

Besides, making them walk upstairs to shower limits the length of their stay :)

I know it's not completely to scale but you should correct the plan and draw in the beds and furniture to be sure everything fits well. I suspect there are some tight spots and the kitchen island seems to need some tuning. I like the plan; it demonstrates that a layout doesn't have to be complicated to be effective.

Quick thoughts:

Long walk from garage with groceries to kitchen.
Dining room window isn't centered.
Upstairs J&J bath - toilet between the sinks is wierd. For a shared bath it would be nice to have a separate toilet/shower room.
Upstairs bed 2 terrace will be on top of garage roof? Will the roof be flat? Is that a problem with water, and wouldn't that look odd from the front of the house?

Where would you put the bed in that room? I'd move the closet to the bathroom wall I think.
Actually all the bedroom closets seem to be in odd locations that cause problems with furniture placement.

Overall the floorplan looks reasonably well thought out but...

I know you said you love the J&J bath because you have two kids. But have you ever lived in a house with a J&J --- especially one shared by a couple of kids??? It is very very easy to go into a J&J to use the facilities, lock both doors for privacy, and then simply forget to unlock one when you leave. I've done it myself. Trust me, kids who want to torment a sibling will accidentally-on-purpose lock each other out of the bathroom until you are ready to throttle the both of them!!! If it were me, I'd reconsider.

Besides, once you've bumped out the left wall by three feet, I think there will be plenty of room to give each of those two bedrooms its own separate bath and still leave room for a very nice sized laundry room. If I'm figuring all the dimensions right, you'll have 14'4" from the exterior wall to the hallway wall and 14'10" from bedroom to bedroom.

You also want to double check the width of the bathroom by Bedroom 2. 5ft is about as narrow as a bathroom can be and that one looks like it may only be about 4 ft wide. Of course, that might just be because the house isn't drawn to scale.

I also think the closets in all the bedrooms are just kind of "stuck in" without any thought as to how furniture will be placed. Keep in mind that you need a certain amount of uninterrupted wall space for things like beds, chests-of-drawers, desks, etc. to sit against.

I would recommend getting a fully scaled drawing and then some scaled drawings of major furniture that you will want to put in each room and figure out how it all fits.

Finally, you might want to figure out if there is someway to add a shower to the downstairs powderroom. You never know when someone in your family might break a leg or have to have knee surgery or something and thus need to use that den/guestroom as a bedroom for an extended period.

There are several things that I'd change if this were for me:

First floor:

-I would not place the coat closet there. It will narrow the foyer too much; making the entry wider will be worst because you will have more "wasted space" between dining room, stairs and breakfast. If you like this setting, then I'd place the coat closet by the stairs and the little storage room under the stairs (aligned with the garage wall)

-I'd use the same kind of flooring from foyer to breakfast/kitchen or I'd use certain flooring for the foyer and another flooring from stairs to breakfast/kitchen.

-It is ok with me not to have a centered window in the dining if I were to place a buffe/hutch at the wall adjacent to the office but I'd center the dining room opening and align it with the light fixture and the window.

-If I were a visitor, all I could see is a little breakfast table at the back of the house. The setting that you have is not too bad but maybe it'll help a little bit to remove PART of the wall and relocate the power room door maybe where you have the sink now. I think you do not need the extra door that you have to get to the Mud area.

-It looks like your erased the washer/dryer. It'll be nice if you can place there a mud bench. In your specific situation, I'd like to see your laundry upstairs.

- I like your kitchen and that is a big plus!

My biggest issue with that plan would be bringing in the groceries and having to walk clear across the house! You really have to think about how you "live" in your house; even right now, though it is not your "forever home". We all have certain little routines that never change :) Just my 2 cents.