This is the final update.

A nice open floor plan that is flexible in use is the best approach for this project. To truly have one space that that is transformable without moving large wall segments to get to the functionality of the space. With access to all day-time functions at any give time. By locating all functions and fixed storage areas at the walls you end up with a flexible space in the center of the room. There is a total of 313 sf of storage space excluding kitchen cabinets.

Resource Furniture will provide the majority of the furnishing, which means fewer custom made items. This will also allow for some additional flexibility with the furniture arrangements.

We must keep in mind that the best strategy is to design a home that is flexible enough for two people.

The space can be divided up as needed. The sleeping area(s) to the east can be closed off to provide for some privacy. 

A concealed kitchen counter and appliances will be in the middle of the South wall. Another counter with the sink will be close to the service wall to the west. This area will double (and look like) a bar when the kitchen is not in use.