I sewed for years in the "breakfast nook" of our small condo. It was about the size of a small bathroom. I agree with going vertical. I bought those little plastic stackable drawers at Target and still have them in my sewing room 20 years later! They work great. I also got a drop down wall mounted ironing board (I was doing a lot of suit making at the time and needed a "real" ironing board) and had shelving on all the wallsfor boxes. I kept my fabric in bags and boxes in whatever closet was free and cut on the dining room table. It wasn't as convenient as having a whole room but it worked.
As far as a shed goes, I'd want it heated, air conditioned, insulated and well sealed with concrete floors and some windows.
