@Fireball RR I agree with Catdaddy on operating outside the loop if possible. I tried sitting in the center of mine but I found myself spinning around watching the engines run in circles. I felt like I was getting dizzy with all the spinning. Fortunately I did have an aisleway to sit or stand in and operate everything. Jetsafl is also correct about the sidings - more is better. If you can, consider making them thru sidings so you do not have to back in/out. I really dislike having to take most everything off the rails in order to put something new on. While your space is tight, you could add a lower staging yard in order not to overload the upper level. You will probably need a 4% to 5% grade to access the lower level, but given you are running shorter trains you should be able to get away with it.
One of the ways to do this in a short space is to have one track descend and the other rise to meet in the middle. You would need about 12 feet to get a 7 inch vertical change at 5% grade. This doubles if you were trying to use 2.5% due to the larger engines. Because you are using max 036 curves you should be able to lay in these track at the back of the layout using up a foot or so. Buildings or scenery could cover this space if you don't want to see it. This approach means you should use the open grid or cookie cutter method of layout construction. (See Linn Westcott's book How to Build Model Railroad Benchwork - it will save a lot of headaches later on. Under $5 used)
