For your own purposes, providing you intend to stay in the house into the foreseeable future, do what makes you happy. If you were preparing to put the house on the market, I'd be less inclined to say do this.
In general, 4 bedroom homes are more popular than 3. But the lack of reasonable closet space and master bath may justify the loss. With 1700 square feet, having the 4th bedroom isn't critical and most buyers wouldnâ€™t' be surprised to find it a 3 bedroom home.
My last thought would be to speak to some local agents as to what similar homes are selling for, which are selling quickly and how the changes you propose may affect the future value when you sell.