Enlargement sounds more organic, like an enlarged mole on a physical body. Expansion is where they make more space in a building or house. Also you can not "enlarge" a house or factory. It implies taking the same factory building and making it bigger. This is impossible. The factory has to be expanded, other parts attached to it to increase it's size.

This is a case of collocations: we usually use the word 'extension' with buildings/construction/architecture. Both A and B mean the same thing, as you seem to understand, it is just that certain words 'match' with certain words in English (those pesky collocations).