Is there a barrier between the extension and the raised area? The harling looks damp and could be a problem with damp. Just something to think about. back garden looks fine for kids to me.
are you referring to the little wall? If so I pressure washed the wall to the left last summer. The right wall hasn't been pressure washed for a number of years I believe.
I highlighted it in the attached. You can get water ingress when the soil level is high and next to the wall like that. It may be nothing but just something I that caught my eye.