I speak Hebrew and can look at your plan - it will be tomorrow before I can do it but will try! I am assuming you are in Israel and if so, are you near Tel Aviv? My cousins were visiting and showed me a website of a friend who is an architect - www.ilanadavid.com. They do incredible work and if you don't get what you need here perhaps you could work with them or at least have one consult with them.

The floor plan is more I-shaped rather than U-shaped, which makes space planning really tough and there seems to be some wasted circulation especially the entry and 2nd level bedroom area.

Hey Guys, Thank you for your cooperation. I'm afraid that I didn't choose the right guy for my project and maybe with your help this will work out!

Would you recommend changing the floorplan to a l shaped one?

On the existing plan: widening the entrance platform to the master on the bathroom side will give you an ability to move the entrance door further to the back and give you an alternaitive bed location for future funiture placement.
On general design: The "I" design and the "U" design maximize the amount of exterior wall and are therefore the most expensive. Here is a design that is "U" shaped. The advantage is the interior private courtyard created by the shape. It is a long narrow design were a guest cottage can be attached behind the garage. I've a current one that flips the plan and does the connecting Master bedroom/ master bath as a bridge with a dry stream-bed running under that section.