Judging by the specifications described, the second storey attic area has a 6 foot \ 1.8 meter ceiling at the peak, which will allow most people to stand up on the upper floor, at least in the middle. Depending on codes and what the garage is made of, you could increase the pitch of the roof and add shed dormers to maximize upstairs headroom. Mind you, it's sometimes less expensive to build an entirely new building rather than altering an existing one to such a large degree. Since the purpose of your particular project is to build an off grid cabin\cottage, if cost is the most important factor, and it's in a locale that allows alternative construction materials and methods, perhaps creating an off-grid home built of earthbags, straw bale, hempcrete, cordwood, or similar material could be the best option. A little research goes a long way in learning about these alternative materials. Not only are the materials usually cheaper than conventional construction materials, but most of these alternatives don't require special heavy equipment to build out of.