My daycare is all downstairs too and I don't have children of my own so upstairs is our living space. However, in the morning and afternoon we spend a bit of time up there with the first one or two and last one or two. I have a few toys in my living room now but before they would just watch a bit of tv while we waited for their parents to pick up.
I think what you are doing now is good and I doubt that would hinder parents but really, who knows unless you ask? If you think it is and if you want to change that, why not put a few toys in a laundry basket and keep upstairs. They could even just be stuffed animals, books and a couple of puzzles. The kids will have to clean this up before eating lunch and before going to bed and than you can put it somewhere out of eyesight when it's not daycare hours

































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