For small space HO would be a good choice. HO also has some less expensive items than O. You can buy engines that are 'DCC ready' and are fairly inexpensive. You could add DCC control and sound as you can afford it. With the DCC ready items all you do is get the right DCC module and it just plugs in, very easy. From what I have read anyway. Might not be a bad option, something to think about anyway? The HO stuff has tons of choices as well. much more than O. There are some really fantastic HO layouts out there too. Some amazing stuff so a lot can be done with it.
However, I know what you mean about HO, I have tried to talk myself into it a couple of times for the above reasons and more, but I just can't do it. I do have space for O, but it is much harder on the budget. I could get a lot more HO for what I have tied up in O, but again I like O and no matter how hard I try, I just can't talk myself into HO. I use Atlas track and switches in O gauge for my layout, just compare the costs of the Atlas O gauge track to their HO track and switches. Makes my wallet ache.