First, if I were to considering changing scales and if money were an issue, I personally would sell off most of the O gauge stuff and just keep what is sentimental, etc. If money is an issue, you almost have no choice otherwise you'd have to make the change so gradually it would be frustrating.
I inherited a large train collection from my Dad. Most of it was HO (or British OO which is similar) but there was also quite a bit of O, S, TT and N !! I've now sold off all of these other scales which gave me more money to use for my HO (and OO) layout. Again, I sold these because of limited space and cash.
My 4x6' HO/OO layout is limited as well and I'm getting restless to expand it. This fall, I'm gaining access to a bedroom in our basement, :mrgreen: so I plan to turn this into my train room. I can either put my HO layout in there -- or -- possibly create a shelf layout. I also have limited storage so mounted wall display cases would also be great for me!
I'm going to reread/study this thread more because, in a round about way, your situation is similar to mine, sort of!
Rob