I would suggest a Murphy type bed in the living room and dedicating the bedroom to sewing and of course a place for your clothes. Closet organizers are a must and don't keep more clothes than you can wear in a week plus those for more special occasions. I assume you will have laundry in your unit. You can always have the living room picked up and close the door to the workroom if company comes. Downsizing is not easy but it does force us to evaluate just what we need and then there is less to take care of too and that is helpful. While it is a very tough time for you, there will be some benefits too.