LOL, don't know if that would be a problem here. Our parrots get a little cranky if we keep them up to late. But then again! Once we get their special room built who knows?
Its a great idea to do, but consider if you ever to sell the house, it will not be a great selling point if the master bedroom is in the basement.
Your bedroom is not small to me...I have 3 feet on one side of our queen size bed to walk between the bed and the closet, the other side is against the wall, and have a foot and a half at the foot of the bed to walk between the armoir and the bed. MINE IS SMALL. My dresser is in our living room. Someday a very large addition is in our future.