Well, you already know my preference is for toys throughout the house, rather than a play room. Not only do we not have space for a playroom, it just wouldn't work with DS's personality. I find toys throughout the house useful because it allows DS to play wherever we are. It can be a challenge to keep tidy, though. My strategies are:
1) Make sure that the most played with toys are easily accessible and easy to out away. In our case, DS favs are blocks and trucks, which are stored in low baskets under the couch. DS can pull them out when he wants to play and then can fill them back up and put them back when he is done.
2) Work with your LO to show them how to pick up. Our DS is three. He has only just recently gotten good about cleaning up after himself, but he still needs reminders. Sometimes he will try to get out too many toys at once, I remind him that he has to put away one type of toy to get out another type. I enforce this pretty well in the living and dining rooms. I tend to let things go in his room a little more than the rest of the house. Every other day or so, we'll pick up his room together. Thankfully, the train table contains most of the mess.
3) Chose storage that works in your house decor, and (is my case) is also inexpensive. Looking at tons of kids stuff can be tiring and make a room feel cluttered even when it isn't. I skipped the typical kid storage stuff and went with either furniture that I already had (such as old bookcases), or inexpensive baskets/boxes that look good and also withstand some rough-housing.
ETA: It also helps not to have tons of toys. If DS doesn't play with something at all, I will donate it rather than letting it add to clutter.
I hope this helps. I think your plan will work.
Good luck and have fun with it! And post some pictures when your done