Debating what to do about beds for our two (soon to be three) daughters - basically, I need to buy a larger toddler bed or a third crib, and I'm not sure which is the better plan. Currently, this is our sleep set up:

DD1 - Crib converted to a toddler bed/daybed. It was broken and repaired while we were sanding it, so it will not convert back to a crib easily - it's pretty much stuck in daybed position.

DD2 - Crib on the lowest setting. Can convert to a toddler bed/daybed later.

Both girls are in one large room; the baby will sleep in a mini-room/alcove off of our room probably for her first year (maybe longer) - it accommodates a standard size crib.

My options at this point are to move DD1 to an IKEA Kritter bed (I have the frame, but will need to buy the mattress & new linens), give DD2 the bed DD1 currently sleeps in (which we may or may not be able to turn back into a crib), and give DD2's crib, on which the height can be changed, to DD3.....OR I can just buy a new convertible crib for the baby. I'm leaning towards the latter option because everyone is happy in their current bed, and eventually I think I'll have all three girls in one giant bedroom (probably until the youngest is 2 or maybe even 3) due to not being ready to move to the suburbs just yet, so I'm all about saving the space.

So basically I am curious to know:

(a) Is the IKEA toddler bed a pain (in the sense that you are bound to either IKEA sheets/mattress or custom sheets)?

(b) Is it ridiculous to expect a (small for her age) child to sleep in a crib converted to a toddler bed until she's 5 or 6? The IKEA bed would give her an extra 9 inches, but I'm not really sure she needs it!

Thanks for any thoughts!