How about a screen room that attaches to the awning. There could be plenty of room to sleep in cots out there, and they would be attached to the trailer for greater peace of mind. Screen rooms can also have privacy panels that can be lowered at night so people can't see in.
I had this type of screen room with a previous PU and it worked great. I think they are only a few hundred dollars, so it is a relatively cheap alternative.
I also would be hesitant to convert the bedroom for kids. Having the bedroom and some privacy was one of our most important needs with a TT. This becomes even more important as the kids get older and we get older. Our daughters are 21 and 24 now, so we all need our space. LOL