Hi April, well it's totally your decision.
For me I'd have to claim BOTH spaces. I like being upstairs where I can see what's going on in the house. I like being about to jump up and check out something going on outside. I like the sunshine. I like being close to the bathroom and the kitchen for fixing dinner, etc.
I wouldn't want to go through another loss in the basement. If you put anything down there I would make sure it's up off the floor and put in containers on shelves above the last water level.
I would stay in the bedroom since you're back there now and then expand to the basement when more room was needed. Didn't the insurance claim include enough to cover the LA? lol Something to save room for in the basement.
You might be willing to share part of the basement with DH so he can have a small man cave area for a new tv room, right in line where you can watch when you do want to be in the basement. Two spaces, two sewing setups sounds like a plan to me. (lol)
Pam M