Just a few random thoughts as someone with a two level downslope garage.
Mine is 22 x 30 with 8' 3" ceiling above the top floor slab and 7' 4" above the ground floor slab.
Top floor concrete slab is supported by wood joists with plywood subfloor.
Ground level is concrete slab over drain rock with drain lines to daylight that work very well.
I did not build the top floor as it was existing when I bought. I did concrete the ground floor.
Like everyone... often thought just a little more elbow room say 24 x 36 deep or even 32 deep would have been great for restoring cars... 22 is a little narrow but Model A and T Fords are not big cars... I can get 6 in for storage with no room to work or two and have room to work.
The downslope is steep and the farther out one goes the more the slope and rear wall height is an issue... we have limits on downslope rear wall heights here too. I drop a little over 7' in 30'
Would rotating your shop 90 degrees be possible?
A 36 wide x 30 deep would give you 1080 square feet and reduce the immense height at the back...
Never having a wood working shop I can't comment on ceiling height but the lower level with a 7' tall garage doors is immensely usable for many things and home to my
BX23, landscape tools, saws, pumps, etc.
The 8' 3" high interior height of the top floor works well for pulling engines and I have a strategically placed beam for this.
It would seem 9' would be enough to work and help with the winter heating?
One thing I did that helped a lot was building a stacked block retaining wall 18' out from the lower level which provides a nice gravel area for those projects you don't want to do inside... degreasing, painting, taking things apart... it was one of the fastest projects I did after being inspired by you terrace work when you picked up your BX.
The aesthetics might* be more attractive without the 30' high rear wall... of course going with a hip roof helps to lessen the visual impact...
My top concrete slab floor is supported by 2 posts below... really has not been a problem for the lower level.
Trees... I love the idea of trees and it makes the PNW such a special place... after the severe windstorm some years back where large firs toppled left and right I had to get aggressive as I viewed each as a potential threat and acted accordingly... plus, my roof surface requires much less maintenance since trees were removed.
Do you need to bore for piers to meet code where you are? Here any slope at all requires piers... often the rebar and concrete piers go down 24' to meet seismic requirements... my garage was built before seismic code but neighbors that built in the last 20+ years have spent a fortune on foundation work... drilling, rebar and concrete
The old way of thinking is a foundation supported the structure and today is flipped in that the foundation holds the structure down in earthquake country.
Square footprints tend to give the most bang for the buck... a 36 x 36 shop is 1296 square feet with 144 lineal feet of exterior wall...
A 25 x 40 is nearly 300 square feet smaller at 1000 square feet but still has 130 lineal feet of exterior wall...