Basically that sounds similar to my upstairs play area which is our diningroom which is 11x13 so about the same. The first thing I would do is spread a few things into the other areas - our books for instance are in the livingroom area - I have one of those wooden book carts with the five levels. The nice thing it is on wheels so I can roll it back to the play room when I want it gone. Take out the craft area and move it to the kitchen area. Maybe not have it out all the time but have one of those organizer towers with drawers that would have the paper, crayons etc in it then you would point it out to parents but it would tuck away in the kitchen. That will open up two more areas in the diningroom. Can you move the playhouse so it is closer to the livingroom area so that you can open up more floorspace. Tuck a bin of dolls and clothes under the coffeetable. Put a blanket over the table and lay the dolls or dishes on the table. Not sure if you have a family room or not but many people who use only their upstairs make their family room the formal part of the house for family only and spread the daycare out into the livingroom area too using the less formal furniture.

It also sounds like you are not set up for very young children and that might be one issue. Is it possible to put a child size table in the kitchen that you could set up with some of your toys or craft supplies during an interview. There are some nice child tables that fold down so easy to put up and down as needed. I actually moved my own eating table to the end of our family room since it is large and we usually end up sitting in there to eat and watch the news anyways - all my kids are grown. Then in the kitchen I have a large child size round table which I set up with toys during interviews.

I found parents were impressed by making areas look child friendly such as hanging some seasonal pictures or a bulletin board in the kitchen for pictures. Make it look like you use more of your house then you really do or at least even though you do use it put something there that shows it.