I was in your exact position OP. I swear your first post sounded like I could have written it 3 years ago. We did make the decision to move. Now we've been here for over 2 years. It's twice as big in terms of square foot size as our old house, and it's detached with a much bigger garden in a village, whereas our previous house was semi-detached with tiny garden in a very busy place. Overall we are happy with the decision, but some things to bear in mind:
Pros of new house:
The driveway - soooo much better than on street parking, I will never go back to not having a driveway
More space inside, we don't feel crowded or on top of each other when working from home
A separate space for DC playroom and toys, and therefore separate from our 'grown up' sitting room in the evenings. This will translate well into a separate 'den' once DC are teens
A big garden, with different areas for a playarea for the DC, a patio area for grown up drinks in the evening
Bigger house with bigger garden = more privacy and space from neighbours, less noise generally (depending on your neighbourhood)
Cons of new house:
We have 2 spare bedrooms and we thought when we moved they would be used often, but due to Covid were barely used at all over the last year and a bit. So we are effectively paying for empty unused space
Everything is more expensive - heating, lighting, DIY and ongoing maintenance, gardening costs, insurance, a cleaner if you have one etc
Increase mortgage costs = less spare cash each month. Depending on your lifestyle that might not be an issue
Everything takes longer because you've got more space to cover in the house - cleaning, changing clocks, putting clothes away in bedrooms, replacing the towels and loo rolls etc. Tiny things but they do add up.
If you're interested OP there's The Minimalists documentary on Netflix. At one point they're talking about typical (American) house floor plans and how the typical house out there has 3 different eating areas - a breakfast bar or island with stools in the large kitchen, then a dining table in the large kitchen, and then a separate dining room with another dining table and chairs. As they ask in the film, how fast would a family of 4 have to run to eat in 3 different places during the same meal?! It's very easy to fall into this trap I think.
But overall OP I would say for us the move has been positive for us in spite of the cons listed above. The pros definitely outweigh them. But it depends on what's important to you and your family.