Retaining wall and levelling

Hi all,

Best off sitting down for this one! Hopefully there is a photo attached. We need to level our garden. As you can see there is a trench from when the extension was built.

We can't afford to level it down to the bottom of that trench as it's quite a large area of garden.
So we thought of building a retaining wall close to the exterior wall and levelling up instead.( Moving earth from the high point across to the trench).

My first question is how close to the exterior wall can we get without risk of water leaking through?

Secondly behind the yellow bucket is the end of our drive, wifey is having a fancyass garden pod thing put there so we will need to level the whole garden to that height.(This is roughly 30cm down from the top of the trench).

As we have 3 young children we don't really want a large gap between the exterior wall and the garden for obvious reasons!!

 

Anyone know how I can upload a photo from an iPhone? Ta