Maybe look into purchasing a Muprhy Bed. I had one when I lived in a studio apartment. I loved it.
As far as workspace.. I am working on that myself. I think the baskets are a great idea. And I am a big fan of shelving in the closets for storage. (Although I have yet to do it in my sewing room, girls bedrooms have them though) Take the doors off and make a beautiful simple curtain you can just shut when you have guests.