There are certainly worse things than a shed. You start with a shed, line it with insulation, put sheets of gyprock up, install a ceiling, lay some boards, and voila, it's almost a proper house. You don't even have to do all this before you move in, you can just lay some carpets over the concrete while you build up the scratch and do the upgrades one at a time. Or, my country, some people even recycle
shipping containers. Start with one and gradually buy more and connect them until they've reached the preferred dwelling size.
That said, all of these require money down. And you get what you pay for. You want to turn a shed into a house, you need a well built shed, made with sound materials on a professional concrete slab. Buying a cheaply made shed means that it'll be too flimsy to modify, and trying to add interior walls will just make the thing collapse on you.
As for thinking that Polissa's family cares for her... would you honestly try to palm off that rotting shack to someone you genuinely loved? Her mother cares for her, and her grandmother, but her aunt absolutely does not. The whole situation just comes off as an attempt to either rip her off, or just distract her and get her to stop whining for a while.
I've seen sheds made with bathrooms installed inside. It's a custom build. Also, electricity.