I would suggest you take out the cabinet that is to the right of the stove and use it elsewhere in the house -- perhaps in the bathroom or dining room with a hutch above it. Then, I would suggest you have someone install a lazy susan cabinet in the corner between the sink counter and the stove, meaning you would move the stove down a bit and have a small cabinet/counter top to the right of the stove. I would suggest you have the cabinets refinished in white and then paint the walls a pastel you like. If you would prefer white walls, then add white-painted crown molding and paint the ceiling a light neutral blue, such as Sherwin Williams Niagara Falls Blue. Then, I would suggest you choose a favorite accent color and use this sparingly in accessories like towels, pot holders, small vases or floral arrangements, and a valence above the triple windows. For a genuine 1940s look, you might have white ceramic square tiles with a rectangular red border installed as a back splash behind and above the stove. If you are replacing counter tops, I would suggest a light color such as white with a beige or light grey vein or striation for some sort of pattern. You might be able to find the same color and design in floor tile OR opt for a wood floor as another poster suggested.

I think the first layout is fine. You might want to consider moving the door for the storage room of the master bedroom so that it opens into the hall. That way the kids can use it for overflow storage. Also, that hallway is big enough that I think it could hold a large armour, providing more closet space. (There's no need to sleep in the same room as your clothes, so long as they're not too far off.) Also, don't forget that while the drawing shows kids in double beds, this need not be the case, so there will be more room for furniture (dressers or whatever) in their rooms. Finally, that step to bedroom 4 will not be odd at all. I've seen it in other homes. It looks clumsy in the drawing but it isn't. What you'll see when you come up the stairs is a bedroom door on a slight diagonal. It's only an odd jagged step if you walk like a robot, in straight lines along the wall, which is what your eye is doing on the drawing but you won't do in real life.

A small sink would fit in the second floor plan w/c. its 2.8mx 1.4m so definitely enough room. If we use the last floor plan with separate w/c then it opens up the bathroom to be 2.7mx 3.2m which for New Zealand standards is a big bathroom for a shower, bath and vanity. I'm still trying to decide if the space for the dining and kitchen areas are big enough?

We have a 900x900 shower and it's plenty big enough. Neither of your proposed layouts looks that great, to be perfectly honest, sorry! In the first layout, you could improve it quite a lot by swapping the toilet and vanity (centre the toilet under the window on the bottom right of the picture if possible), and having the shower door on the other wall (beside the door). Then, you could have a towel rail on the wall beside the door (i.e. behind the door when it's open), which would be accessible from the shower but hidden when the door was open. An 800x1200 shower might be a good size for your space. You'd have to choose a toilet that doesn't protrude too far, plus a narrow vanity. With that layout, you could have a long but narrow wall-hung vanity, with a big mirror covering the wall between the windows, which would make the room feel bigger and would give a good amount of storage. Also, you may find this helpful: http://www.houseplanshelper.com/small-bathroom-floor-plans.html?utm_content=buffer4aa20&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer