It's funny, I was going to say "know your building codes," and then I saw your request for code horror stories. We avoided those problems by making 100% sure we were within code, and getting an affirmative ok from the county on any questions that were close.
E.g., our county frowns on living space over the garage. So I changed the plans to eliminate the upstairs entirely, even for storage (we didn't actually need the storage, we have a 3rd floor in the house). We also had significant setback requirements and different requirements for attached and detached garages; our house required a detached garage so it didn't look like a big square boil out of character with the house, but the code said we couldn't put a detached garage where we wanted to. So our contractor came up the idea of attaching the garage to the house with a covered pergola, and the county agreed. And now that's actually my favorite part -- I love finally being able to bring groceries in during the rain/snow without getting soaked.
Note that we managed these complexities by hiring a GC and letting him run that process and just making it 100% clear to him that proper permitting was a big deal (i.e., we are not the people who are asking him to skirt the requirements to save a buck). If you are trying to be your own GC, you need to learn your codes inside and out and spend a lot of time with the guys at the building department to make sure you know what permits are required, what inspections are required, etc.
More practical advice: be careful with all the bells and whistles. Our first attempt at the dream garage resulted in a quote for $135K!! Our architect was more than happy to add all the cool stuff we wanted (roof deck!), but when we started talking to the builder, it was clear what all that stuff was going to cost.
OTOH, additional space is cheap, so make it oversized as much as you can reasonably fit in your space, with the oversized garage door -- some modern SUVs can't fit into normal sized garages, and even if you don't have one, that could be a turnoff to the next owner. We went 24'x24' for a two-car, and I love the space that gives us to maneuver around the cars and store stuff and wish we had even more so we could fit the damn bikes in.
And speaking of storage: if you do not finish the interior of the garage, the open stud bays are *awesome* for storage. Get some hanging hooks and bungie cords and hook-and-eye things, and you can fit brooms/mops/rakes, golf clubs, those fold-up chairs you take to all the kids' games, etc.
Finally, I would re-think the idea of the second floor being really usable shop space. I can't imagine toting tools and equipment and supplies up and down the stairs. It sounds like you don't have much choice, but one alternative may be to increase the depth or width by 3' or so to fit in a workbench and work area along that entire side; then you can just pull the car out when you need more space.