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A PS thought - tiny house owner(s) could add another tiny house to provide children's bedrooms OR shop/hobby/home biz space.

That (court yard) concept was one I had some time back too. Where we lived before any structure under 120(200?) sq. ft was considered a 'shed' and didn't require a permit etc. Building a cluster of small structures around a deck/patio common area just made sense. We thought of doing this for some B&B potential, but that turned out to be a snaky trap so gave up on it.

I grew up in a small house (probably 800-1000 sq/ft) and while I can appreciate less initial outlay (material/labor), having lived in an OLD travel trailer too, efficiency isn't comfort and having to 'crab walk' or reach across to make a (wall hugging) bed gets old quickly. Plus unless one observes the old trailer dictum - every time something is brought IN, something must go OUT - such an 'efficient' morphs into a dig-thru collection of this and that. One can 'add space' - visually as well as functionally - by making use of outdoor patios/deck accessible from living areas. But that is material and labor too, though those don't add as much to tax evaluations as interior spaces.

One thing to consider is to create a larger 'garage' that includes a 'shop' area. Building codes are relaxed for such a structure and its taxed at a lower rate too. The 'shop' area can be partitioned off for use as multi-purpose (business/guest/storage) use after the permit is signed off. Doing that also impacts the main house by requiring less heating/cooling, and cleaning too.

Designing layout of a tiny house can get lots of hints/ideas by looking at travel trailers. In fact the basic idea and use of 'tiny houses' is very close to travel trailers which are plentiful and cheap used. The bonus being that travel trailers are considered movable by building departments can dodge some of the permit hassles AND provide a 'restroom' for a construction site too.