I think safety wise you'll be just fine with the arrangement you have planned. You'll be aware enough that if your older child is crawling over you and could potentially hurt the baby, I think you'll wake up.
Now, the nightwaking, that is what I would get prepared for. In the early weeks DD1 would wake to DD2's crying even from 2 floors away (DD1 wasn't sleeping with us when DD2 was born and she was 18 months old). It was brutal. I was changing DD2's diaper in the furthest area of the house from her room which was our tiny bathroom. Over time they got used to each other and now they hardly ever wake each other up. But, if you have any other possible areas to sleep I might plan to have DH sleep with your older DD in another room at the beginning. DH slept with our oldest in the guest room a lot the first few months because even though she'd been sleeping through fairly reliably, she was teething and probably just the transition, she was waking up a lot and wanting someone to sleep with.
Now, the nightwaking, that is what I would get prepared for. In the early weeks DD1 would wake to DD2's crying even from 2 floors away (DD1 wasn't sleeping with us when DD2 was born and she was 18 months old). It was brutal. I was changing DD2's diaper in the furthest area of the house from her room which was our tiny bathroom. Over time they got used to each other and now they hardly ever wake each other up. But, if you have any other possible areas to sleep I might plan to have DH sleep with your older DD in another room at the beginning. DH slept with our oldest in the guest room a lot the first few months because even though she'd been sleeping through fairly reliably, she was teething and probably just the transition, she was waking up a lot and wanting someone to sleep with.
