I love the rotating idea of Kannon99's. It's much more organized than our rotating
We just swap the entire batch of toys with what is stored underneath and inside her crib (great toy storage and napping area
) and always have out the blocks and musical instruments and books (although we rotate the books, and occassionally hide one or two, ie the wheels on the bus after 500 times reading it in one day
We have a tiny tiny tiny house (850sf) and we made room for her toys in the livingroom by giving her 4 shelves. We have two big bookshelves and the bottom 2 shelves on each are for her. The very bottom of each one has a couple baskets and boxes with containers for a couple different types of toys. The 2nd shelf of each one has all her books except for some that sit on the coffee table. We have one other spot in the livingroom with a big basket full of toys tucked away under a table. It's usually pretty easy to deal with everything b/c it all tucks away under the table and into the shelves.
Also, I dont think 16 mos is too young to ask them to help clean with you a little. It's not very efficient, but dd is almost 17 mos and she helps clean up in the evening before bedtime. I just get out the containers for whatever toys need to be cleaned up and ask her to put things in the containers one by one. We sing the song too
"Clean up, clean up, everybody everywhere
Clean up, clean up, everybody do your share"
Oh, and sometimes if the grandparents are open to it, it's nice to have toys that are special b/c you play with them only at granma and granpa's
good luck, clutter busting can make anyone
i know that's how i feel these days!