Just a few quick thoughts:

I'd put sconces (and if there are outlets you can do pin-up sconces above the nightstands. Instead of nightstands you could do built-in drawers. This will use up every inch of width and you won't have stuff falling behind the nightstand.

I would consider a platform style bed with no footboard. It would be good if the legs were a little recessed from the edge of the frame to avoid stubbed toes in the small space. You could 'paint' , or frame some fabric or wallpaper in lieu of a headboard. This will save a couple inches.

The wardrobe could also be a built in, to use every available inch. If it went to the ceiling, you could store off season clothing on the top.

Have you addressed what will happen if one of them develops mobility issues? This is not a wheelchair friendly room? The minimum width for a wheelchair passage is 32 inches.

Ditto the bathroom they will use. In there I would definitely add grab bars by the toilet and shower.

I think they will need more storage, but maybe you can work that into the family room?

Instead of tables beside the bed, consider small dressers. A few drawers will be welcome for such things as underwear and stockings.

Consider wall-mounted sconces above the bed for reading lights instead of lamps on the end tables/dressers.

Be sure that the bed is a height for sitting (for putting on shoes, etc.) because you don't have room for a chair.

Will they need a desk area? Is there another place in the house that you can devote to this? They will need to write checks, send letters to friends, and probably use a computer. Will they bring books or other things that need a place for storage?

P Banos - can you send me an example of a platform bed with no footboard?

The reason i was thinking of getting a headboard at least (like maybe an upholstered one) was so if they want to sit up in bed and read it would be more comfortable?

If one of them develops mobility issues - I'll have a whole host of other problems to deal with in the future. Currently our house only has a powder room on the ground floor. They would still need to go upstairs to shower. But, we need to work with what we have at this time. In the future, depending on finances, I can look into getting a shower put in downstairs. Regarding the storage - I am looking to expand my laundry room into my garage workshop area and basically turning it into a huge walk-in closet for their things.

@yvonnecmartin

There is plenty of room throughout the house where they can sit and relax and write. Their bedroom is connected to the big family room with fireplace and tv and leads out to the backyard. On the same floor is the kitchen including large eat-in area, dining, and living room :) I also have a walk-in attic upstairs and a partial basement where they can store things they don't need on a daily basis.

Modern Gray Linen Fabric Platform Bed, Queen · More Info

First one has no headboard. This is the basic style I have at home, though mine is all wooden. It takes up the least space.

Float King Bed in Walnut · More Info

@P Banos

do you think a platform bed would be too low to the ground? I'd like for them to be able to sit on the bed with feet touching the ground - like a comfortable sitting position for putting on shoes or anything of that sort.

Mine is normal height for a bed, but I use a boxspring + mattress. Not just a mattress.

Your idea for their bedroom is very good...Now a question....do you have any part of your house that they could have a bedroom with a sitting room and a close bathroom to themselves? Maybe in the basement or maybe up stairs? I know you mentioned they didn't want to do stairs but I have seen small elevators put in houses (sort of expensive) but if your home is built so that is possible, that is a solution. A friend of mine built their house with an elevator in it. I know having them live with you is really great but will be a big change for both of you. I wish you much happiness with your kind gesture.