My Mom raised 7 kids plus in a 3 bedroom house, about 1200 square feet. Her sewing machine was in a closet that was just a bit wider than the open cabinet. Dad built little narrow shelves with bars across to hold patterns, etc. Mom didn't have much of a stash because fabric was only bought to make clothes, including jeans, for all of us, including the foster kids. But there was always a box full of scraps that we could pull from for doll clothes, and that she could pull from to make scrappy quilts. We cut on the dining room table (is was the only one big enough), we set up the ironing board in the kitchen, and we did our fittings in the hallway which is where the sewing machine closet was.
Where there is a will there is a way. Mom always said you just have to keep a small space tidy so you have room to turn around.