Anne,
You pose a vast question, and the replies so far indicate the breadth of possible answers.
Someone else gave you the "link" to Halcyon Days, with Bill and El, and that's the bible of live aboards on smaller craft, as far as I'm concerned. I was going to follow them, until I stepped on a CD-22. Being 6'3", I could not see out the windows, even sitting at the helm. Which led me to a CD-25, and then, finally a Ranger 25. Then, I sold my home, put everything in storage that was worth keeping, went " off the grid" and began a live-aboard experience on a Ranger 25.
Your previous experience with "small is beautiful" is the most important gauge. Others have lived on small camper trailers and small sailboats, or in small cabins, before living aboard a small boat. You did not say what your Living Small experience was, and that's an important factor. For me, I have lived from only a backpack much of my life, and my wife and I had a 26' Airstream trailer and lived on that, so the Ranger Tug seemed not only spacious, but even more elegant than anywhere else I'd been that was that small.
And I think I will emphasize that the feel, the fittings of a small space do matter, very much. I love the teak wood interiors, they are alive and friendly. I love the brass portholes, and the wonderful stereo. When it's raining outside and you're confined to those quarters, they had better look good to you, hour after hour.
Likewise, I can say that all the light from the big windows and the 5 skylights DOES make a difference. I never feel too constricted or too dark on a cloudy day, with all that light pouring in all those windows.
There are mechanical considerations, like how much fresh water do you use, how much do you use the house batteries when not in a marina, but they all depend on where you're going and how much you are willing to pay moorage fees at marinas. Bill and El avoid marinas whenever possible; they love life on the hook. I have found myself liking a little more frequent visits to marinas, to get electricity, fresh water, and stop worrying about being a skipper for a few hours, or a few days. Then the Ranger 25 becomes a very nice hotel room on the waves, as someone told me this month.
If you can afford the R-29, of course it's more spacious. If you plan to stay in one continuous body of water, like Puget Sound, or some Inside Passage or canal and river system, the R-29 is also fine. If you plan on towing it from place to place, be sure you understand the weight and width differences, and how that will affect your towing vehicle and your comfort on the road. I like the R-25 on the road; it's not TOO big, and my 3/4 ton pickup handles it fine.
Hope that helps. Contact me further if you want some stories too long for this medium.