if it is going to work for YOU Now, I'd do it.

Can you post a drawing with dimensions? doesn't have to be anything fancy or to scale. There might be another solution you havent considered.

This is about what we were envisioning.

Here's the current layout

We don't want to move the laundry fittings. This plan would only require building some interior walls and a bit of electrical to move a couple of switches.

There would have to be an excellent benefit for me to give up square footage in a family room. Eliminating a hall often redirects walkways through the middle of seating areas; general speaking you want direct walkways and sightlines through a home.

can you sketch out the whole floor so we can have a visual how all these spaces work together?

in the meantime, mock up the walls for your idea with boxes and get an idea of the impacts to your traffic patterns and furniture arrangement.

I just saw your floor plan. I would not block that hallway off. No way.

Can you just add a hanging rod to the existing laundry closet? If you're selling or renting in 2-3 years why invest in this change that may have minimal if not zero return on investment?

In my area it is not uncommon to have the washer and dryer in the garage. Another minimally invasive (unless your WH and furnace are there) change would be to move the appliances to the other side of the garage wall.