It's easy too make room when you need to, rearranging furniture, painting and adding mirrors will make a room look bigger. It's worked for us and I'm pretty proud of her first little nursery nook, it's still a work in progress, looking to add the alphabet somewhere. I've sang the alphabet song to Sophia since the day she was born, just because I didn't know many nursery rhymes and she loves it!
Some pics of her little space!
I made the garland, and cut out the heart shaped felt, hung one of my favorite dresses, (the first dress her daddy picked out for her) and added lots of boxes where I could organize diapers, blankets, towels, etc. I didn't want the traditional pink girls room, although I ended up getting lots of pink stuff, it doesn't feel very traditional to me and I love it!