You're dealing with big city politics and over-government there.. Some local ordinances are so over the top that they discourage development and encourage abandonment and decline of neighborhoods.
I do not envy your situation at all. Dealing with strict local building codes and enforcement has brought contractors to their knees before. I suppose the ordinances are there for a reason, brought on by past experiences, but if they have brought remodeling to such a standard that you can't get approved.. Then they have surely stopped development for others also. Electrical, Plumbing, Heat and Air, Insulation and Building Material Standards are important. But if a structure has stood for 50 years as is, it must not be too bad
It sounds to me like the city wants to keep fly-by-night crews out and wants to control fire and health hazards. You need to find a contractor who has dealt with them before and ask him how far the city went to inspect and what demands they made on him. Doubling the size of a home will surely place a larger demand on the electrical system, the plumbing and the heat and air. Consider the added weight on the exterior walls and check the width of your foundation walls. The code is there for a reason, make sure your existing structure is up to par before you invest your money in a project that will never pay for itself after the city is done with you.
Only a local who has been through your situation can help you.
Welcome to the forum!