I've been in your situation and it's hell trying to keep everyone happy. FWIW I agree your plan sounds perfect. The 12 year old needs to get over it.
When I first moved in with my DP (five years ago) he was in a 2 bed house. My DD's were 13 and 6. His were 16 and 8. His 16 year old wanted to live with us but insisted on having her own room. She also wanted a double bed (in the biggest bedroom), a lock on her door and allowed to have bf's sleep over. DP said absolutely not and it all kicked off from there.
His ex got involved. Said my two should share the small bedroom and his two should have the big room. Meaning the 16 year old got a huge room to herself except when her 8 year old sister was staying EOW and would have a blow up bed.
Dp and I said no, that the two teens would share the the two younger would share. His oldest said it wasn't fair that my 6 year old had a room to herself all the time while she had to share.
In the end she refused to move in. My DD's had a room each with the 6 year old having the bigger room which we put bunks in so the 8 year old had her own bed and space.
5 years later his EX is still fucking banging on about it. How it was really unfair how her DD (the then 8 year old) had to share with the 6 year old and she should have had her own room.
This was a two bed house! Did they all think we could just magic up an extra three bedrooms by magic? This apparently, is why she no longer wants to come and see DP despite now having the option of having her own room while my teen is at uni.
Wouldn't it be lovely if we could just magic up a house with a million bedrooms to keep everyone happy? I just couldn't justify rooms sitting empty most of the time when there were other dc sharing a room. Batshit.