Dude! You don't even have room in that living room to put a desk! Wherever you end up putting it, consider using headphones. Not a great choice for mixing, but your mixes are going to suffer from non-symmetry and lack of acoustic treatment with monitor speakers.
No way you can use one of the bedrooms? Anything in the living room is going to be a compromise, at best.
She wants to use the living room for writing and dancing.