However, it looks like to the left it connects to another room (maybe the living or dining room) if so, I would see if it was load bearing and maybe take down that wall and make it a little more open, probably put an island where that is.For the outside, it mostly looks like it needs a new paint job, fresh grass, and some pressure washing. 

I will spec materials/colors/repair method when I feel it needs to be done a certain way or I want something different/special.  

Adding a 500k house to the property would put it into the 2m price class (was my retirement plan) at that point I’d sell it with around a 1.5-1.8 gain on my actual cash invested and the only people who would be able to afford it would be the Wall Street bankers that wouldn’t put their kids in the school and wouldn’t stimulate the local economy.

My family and I are completely on board for an owner occupied/house hack option, however I see this could be challenging, being the landlord downstairs or next door with 3 screaming children; banging on walls and the likes as most children do.

It's made by a company called general finish, Java is the color.

I mean what else are they saying for that $7k, "break-through" revelations of genius like pick 1,2,3 wall colors for your units and paint em all with that keeping the paint codes so refresh paint can be done via touchup.....

Cathedral ceilings/windows, tongue and groove walls, etc.

I got sidetracked with regular business and hit a wall finding money so I stalled out.

A few weeks after painting, light brown marks appeared at the top of some of the top corners of a few of the walls on both sides of the house, upstairs and downstairs (not the ceilings, just the tops of the walls). 

If it is fully insulated then you are in business, if not, you'll have a lot more work getting the walls and attic in condition to have a room. #3 I don't see any issue there.