Sqft Lot vs. Sqft Listing Question

[Christian B.]

Hello BP Community, 

I have been learning a lot through podcasts, audio books and of course BP forums. I have been analyzing different markets and running different ideas in my head when it comes to Real Estate Investing. When I am looking at listings and I see a "Huge" Sqft number for the current low bed/bath obviously it catches my interest for force appreciation technique. But, I have started to notice a trend which sparked a question I cant find the answer for. 

What is the difference between Sqft and Sqft Lot?

In doing some research I found that the main difference is Sqft is the Sqft inside the home. Compared to Sqft Lot is the entirety of the land the property is located on. (Please correct me if this is bad information I have come across.) 

Which leads me to my next question, in-which I will list an example below:

Multi-Family Home (Duplex) (1bd/1bth) per unit
1295 Sqft / 5227 Sqft Lot
Yr. 1980

Which leaves me to question:
Wouldn't it be possible to expand?
Why was a 1295 Sqft built on a 5227 Sqft Lot? 
Are there building restrictions I dont know of?

Sincerely,
Christian Burns