We live in a small flat as we are just 2 of us and have been saving for a place to buy. So we have gotten used to smaller sized living areas!
The bedroom thankfully has a closet, could you build a closet into the larger bedroom? If not, suitcases could go on top of the wardrobe. We keep out of season clothes in the suitcases (we only travel using the large cases a couple times per year). We don't have a dresser because our under bed drawers and a couple of built in shelves in the closet hold everything we need.
We did away with the microwave, and have a small toaster. Other than the coffee pot and kettle we don't have any other appliances that go on the counter. We also bought a little rolling trolley from Argos to use as extra counter space, very useful for food prep.
We have just a smaller hoover so it can go in the cabinet under the sink.
All of our dining room chairs and the table itself fold away, so they can be out of the way in a corner of the lounge or they can be used.
We have a little puffy bench thing which has storage inside, and that's where we keep our towels and other linens.
It is doable!! Think about what you really must keep and if you don't use or love an item, you don't need it.