@StylishMummy I think it is a nice house you have some lovely rooms. I think you should stage it how a family could use it rather than how you use it IYSWIM? I agree that the virtual tour does you no favours, it shows up too many negatives giving first time viewers the wrong impression. And agree with others that you need better photos, add some accessories and draw back and open the blinds, you can see how this works by the kitchen photo.
I would move the furniture away from the walls particularly in the conservatory, put the table in the centre and open the blinds, this will draw the eye line away from the floor. I would remove the clutter from behind (your lovely) sofa, bedroom door and in the 3rd bedroom as this gives a viewer an impression of lack of space.
I would definitely go 2 bed with a closet / study, despite what the EA agent says. If I was looking for a 3 bed I would discount this straight away. If I was looking for a 2 bed your home may not come up on my search criteria whereas I would see the extra room as a bonus in a 2 bed.
I think it is unfortunate that your neighbour has recently sold and there have been some other nice houses sold for similar price in your area which still come up in the search and people do compare.
I think you have been very brave, however if it helps you sell your house then well done to you. My only concern is that you do realise that you have really outed yourself online, not only your full address but your photo on the wall.
Good luck with the changes and your future move.