The fumes can pose quite a problem - this would be especially exacerbated with young children. I'm using an airbrush with acrylics and the fumes are still quite bad. Given your space constraints, it sounds like buying/constructing a spray booth would be inconceivable (this might be a good option if you did have the space).

If you haven't already bought the AB/AC, then it might be cool to master the art of hand brushing. In this way you can minimise fumes as well limit the space you use.