I love to work with really soft yarns, I hate scratchy sweaters and such. I always say that it's no fun to buy an awesome piece of bling that you don't want to wear cause it gives you the itchies! I have been having lots of fun with soft chunky yarn as well as cotton yarn making necklaces, but I hope to soon be making some clothing as well. I also use a LOT of clear tupperware to organize my fabrics and yarns, and although at the moment they are getting a little jumbled, I can still see what is in them and it is a BIG help!
My only advice is that no matter your space limitations, you can ALWAYS figure out how to have a "me" space. It may be a corner, or a desktop or a box by your favorite chair, but it IS possible.. (and SO worth it!) TRUST ME :)