It's kids that change it for me. I lived in a 800sq/ft little cape cod style home with a 2 year old while my place was being built. That would had been fine for me and my wife. But after a really long winter it was almost a prison with a toddler. She had no room to run. Even a few toys turned the living space into a destruction area. There was barely enough room to put in a small bistro set to eat at for dinner. Forget trying to have a family over to eat at the same table.
The kitchen was disconnected from the rest of living space and about 60 sq/ft in size so having more than one person in there was a disaster. So you felt like you were ignoring your family if you went in and cooked after you got home from work.
There was no room to run, throw a ball, stretch out, do a cartwheel, ect.
In my new place I've got a full open basement that we can ride bikes or scooters in. Play basketball. Play soccer. In the bedrooms you can actually have room for a decent sized bed and a dresser plus room to play on the floor. The kitchen is nice and open and flows into the main floor living area so you can cook dinner and socialize with friends and family.
We just live in the midwest where half the year it's below freezing and snow on the ground and the other half it's possible to be 85+ degrees and oppressingly muggy. Being able to have fairly active play inside is a nice perk.