The ISS is absolutely intended to be expandable, and moving it to a higher orbit is done routinely.

Basically the reason to put a bigger station in a higher orbit is to reduce the effects of atmospheric drag.

The ISS loses kilometers of altitude over a matter of months and has to be boosted regularly to compensate. A bigger station would have an even worse time of that. So putting it in a higher orbit would be worthwhile for that reason.

The ease of escaping earth's hill-sphere is a perk, but the reality is that half the work is achieving orbit. Once you're in LEO, you're halfway to anywhere. Higher or low orbit isn't a big difference compared to getting up there.