I build on that lot all the time. In fact, I was working on a one-story remodel earlier this evening. I've even built a three story home on there and put a basketball court on the roof. You can add stories to the existing building but you're better off starting from scratch.
For the roofing, use the half gable or shed roof as others mentioned. If you have a keyboard and mouse, you can also hold down the Shift key and drag the arrow to lengthen or shorten the roof overhang on each side.
I'm on a PS4. That's why I mentioned the keyboard and mouse bit.