Interesting idea,build up it cost less..

Build forward? Put the garage in front of one of the bedrooms with the master bedroom amenities in front of the other. Just be careful of lighting, otherwise building up or separate garage may be better

An architect, builder, and 125K later and you'll have the answer. Never buy a house that you "think" you can remodel. If you are looking to remodel, you need a team assembled before you ever househunt. As in, have them on a paid retainer to ensure their opinions of the property's potential. Otherwise, you are in a situation where you may buy something that can only exist as is. Lots of regulations about building near water. That's just one of the reasons that you need experts on the front end.

Just an off the cuff suggestion, maybe an attached garage off to the right so you can enter from garage into the kitchen. Then maybe as suggested above put the master bedroom and bath over the garage. Of course you'd need stairs, maybe mud room off the garage, and as Sophie has said, an architect to design this and tie in roof lines etc. All depends on the budget. Just a thought.