Alright, first I'd like to point out something. If we look at our ability to expand the Sacred Forest Temple, we can see it would cost substantially more than simply building a new temple. We can infer from this that building bigger and grander things is much more costly than building new things.
What we should focus on, then, setting our options up to be deeper rather than broad. Also, based on what we all want in general, we're basically making a city with this, as we'd understand it in modern times. Lots of facilities to support a great deal of functions, self contained stores, defenses, specific buildings and jobs to support them. It's not critically important, but we should definitely keep in mind that we're basically making a specialized city. We also need to keep in mind some options take up more physical room than others.
So, with the concept of going deeper and paying attention to options that would take more land, what should we focus on?
Great Hall gives us a community center, at it's larger states we start turning it into more of a market square than anything else. This is one of the 'large' options. It will take up a substantial amount of room as we make it bigger, and we're probably looking at something along the lines of 2 expansions to get us to a small-moderately sized community gathering center. Otherwise it increases the strength of our governments diplomacy values.
Second is the shrine. We're required to get at least one expansion if we want to keep our religion happy, and we gain an extra temple and increase pilgrimage power if we do that. Further expansion is probably not something we actually desperately want, as we start drawing power away from Sacred Forest and put the new center of religion in Valleyhome. Well, if we want to keep religion somewhat decentralized or separate from government we don't want to do it.
Third is the library. We definitely want to make this a notable feature, as it addresses many of the issues we are building the palace for in the first place. Two is needed for an extra library, which we will want for the census, more will start making our government office a repository for knowledge, which is very... tempting. There may be a slight improvement to education locked behind here, though I may be biased there due to looking for that to happen in the palace in general.
Fourth is the Gardens. This is one of the largest parts of the palace in terms of land use, and probably the cornerstone behind our culture. Getting more gardens increases our divine stewards value itself, and starts giving us a much more distinct cultural identity. The Ymaryn will be more proud of being Ymaryn. The fact this is only in one location, though, may decrease the effect to some extent. I expect a big enough garden to cause a different kind of pilgrimage though.
Fifth is storehouses, which are mostly for disaster insulation. We don't need them now, but then again disaster insulation is always the sort of thing where by the time you need it, it's too late. The central storing of goods is said to ease administrative burdening, but the amount is honestly not going to be by a truly noticeable degree. It will take up some room, but probably not by a huge amount.
Sixth is the Arsenal. It will start centralizing our military and actually forming an army under the King. This is critical for dealing with our martial problems, and likely to advance tech if we increase it enough.
Fortifications are absolutely needed, but we're not looking at a situation where we should increase them to an absurd level in the near future. Still, having your capital be hard to breach is of immense importance and we should definitely try to get it sometime.
So, to put this in an easier to digest format.
Great Hall: +Diplomacy, +Community
Shrine: ++Religion
Library: ++General Administration
Gardens: +Culture, +Diplomacy
Storehouse: ++Disaster Administration
Arsenal: +Production, +Military Centralization
Fortifications: ++Defense
At least that's how I'd spread points on these.
Looking at them, the things I consider most important for our current situation are the Great Hall, Library, and Gardens. Our administration, community, and culture, are what are currently being strained, so I'd like to focus on them. I think people are underestimating the effect an exceptionally large library would have, by the way.