Each room you add has two sizes to upgrade, so there will be the initial purchase and then two more sizes to get before you can add another room. From what I have seen so far you can have the main room and then three other rooms (back and two sides). I don't know yet if you can do more than that.

For the house, there are four features: wall, roof, door/windows, and features for each style. The styles are castle, log cabin, toon, Italian, and Tudor. Once you have fully upgraded the house to one style you can remove everything for a price and then start over fresh.