I like the look of the proposed floorplan with extension, but a couple of things to consider (which I am sure you have already taken into account) - where do services enter the building? It can be more costly/complicated to move a room that requires plumbing and gas from one side of the building to the other.
Do other people nearby have the same bungalow with a similar extension? That can give a heads up as to whether you are likely to run into any planning permission issues, if others have done similar it should be simple but it can prove more difficult if you're doing something different than what others in the same type of dwelling nearby have done.
Purely personal here, but I ruddy hate open plan with a vengeance - more difficult to keep an area warm, difficult to keep pets out of the kitchen when you're preparing food, difficult to keep cooking smells out of other areas, so personally I'd want a wall and door between living room and kitchen/dining area. I know open plan is still all the rage though but not everyone loves it just cos Phil and Kirsty say they should
Oh also (I have worked as a professional painter/decorator) it doesn't matter how broken up stuff will be when you shift it through the hall, always do the decorating last. Although you can do another coat of emulsion as soon as the first is dry to the touch, it actually takes around 3-4 weeks for water based emulsion to cure/settle on the surface, longer for oil based gloss/eggshell etc. and exposure to dust in that time will result in a finish that isn't as good. And it only takes someone walking through with a bit of wood to glance off the wall and that patch will need to be filled, sanded and repainted. So always make that the last thing you do.