Should I switch to a larger room?

I would definitely live/listen in the larger space, and sleep in the smaller space. 

Switch, PITA, but well worth it. Get rid of/sell some stuff first, makes it easier!

Office Work? Computer Time? TV?

dbp24 has it 100% correct.

Larger rooms are almost always better unless something very unique is wrong with the large room.  Why are they usually better?  Boundaries are further away! 
Brad 

For a 10x12 room, I would suggest placing 8 to 10 artificial ficus 5' trees behind, between and beside the speakers and one on each side and slightly in front of the listening position.  Maybe one behind the listening position.  These will break up room reflections and improve the sound quality of your room.  

Yeah, yeah, yeah....  I know the room will look like a section of the equatorial Brazilian rain forest, but will improve the sonic characteristics of the room.  

Even if you do move to a bigger room, using these artificial ficus trees will diffuse the sound for a tenth of the cost of a basic room acoustic treatment.

Bigger is better.