You assume correctly! I live in a one-bedroom condo in Vancouver, with about no square feet to spare. This is how I've managed.
• At Michaels, I found two ArtBin plastic storage boxes for tools, paint, thinner, and a large "no name" flat plastic box for two-dimensional items such as sandpaper, thin strips of styrene, small plastic bags, and a small Olfa cutting mat.
• Another item I found at Michaels was a roll-up case for storing brushes; I also use it to store a small aluminum ruler, a small screwdriver (for opening paint tins), and even a couple of dental tools that I have found to be useful.
• At Magic Box Hobbies in Kerrisdale (a neighbourhood in southwest Vancouver), I found a plastic organizer that holds about 20 bottle/tins of paint, files, an X-Acto knife, a pin vise, and scissors in a lazy Susan, and has space for extra blades, drill bits, Q-tips, and scissors.
• Our apartment is not well lighted (no ceiling lights), but I found an inexpensive LED desk lamp with built-in magnifier that really helps my aging eyes.
• When I want to work on a model, I cover our dining table with a plastic drop sheet, get out my tools and supplies, and the lamp, and get to work. It takes perhaps a minute and a half to set up, and not a lot longer to put things if I've been reasonably tidy as I work.
At this time, I'm using spray cans, but not inside, of course. Using a banker's box, I built a "spray booth" heated with a lightbulb and put it on our small-but-big-enough balcony. It's mainly useful for preventing dust settling on a freshly painted model, but I'm also a bit concerned that my neighbours might notice the odor, so I'm now thinking about buying a portable spray booth that would fit on our stove, and an airbrush so I can use acrylics and have a bit more control over my painting.
I hope this helps. (I am not able at this time to upload a photo to my web site.)
Bob