Our house is very comfortable. It's not huge, but we all have enough space, except when it comes to the girls' toys. We struggled to keep all their toys in their bedroom. Eventually we just surrendered. We have all the girls' Barbie stuff, books and puzzles in the living room now. It's their main playroom. They have the entire room, plus the adjoining dining room to play in every day.
What I don't understand is how with all that space, they always end up playing in the smallest space in the room. They set up elaborate games in the space in the corner behind the couch. They have a two "story" doll house on two shelves in the TV cabinet. They spend hours playing with their dolls in this cabinet. (Of course, they don't play with the real doll house they have in their bedroom.) The other day I found them in the foyer. The living room was empty. They moved all their stuff into the foyer.
I don't know what it is about small spaces, but they always end up playing in the smallest possible space. Some days I think we should just move all their stuff into a closet and reclaim the living room. They'd be happy in the small space and we'd get a room back. I realize it won't work, though. I'm not sure we have a closet big enough for all their stuff.