I would make the bedroom behind the kitchen into a very large bathroom with a shared plumbing wall and make the other bedroom larger for husband and I. Then the loft will be for the girls to share and to have their own space.
I think I would make the fireplace side the backyard, moving the garage door to the front. I would also take over bedroom #2 for bigger bath with closet walk through. Removing master bath and giving it to other bathroom for a second full suite with walk through closet for Prince William