You are right for all of those reasons. I've been stove-top brewing in an apartment for years. I rarely brew 5 gallon batches any more. I always have a 2 gallon batch of IPA fermenting at any given time. 3 ounces of hops in 1.75 gallons of beer = 9 ounces in a full size batch, which I would probably never spring for, but I can totally buy 3 ounces.
For two gallon batches you actually don't need a chiller or ice, you can just use your sink. Put the stopper in the drain but leave a little gap, put the pot in the sink, and turn the faucet on. Come back in 3 hours and you are good to go.
For three gallon batches you can use a 6.5 gallon bucket. I have a couple 2 gallon buckets I use for smaller batches. You can do a 3.5 gallon and a 1.75 gallon at the same time with a partigyle mash, it's worth looking up and pretty easy to do. Here's a chart for doing it:
BT - Parti-Gyle Brewing [table]
Don't forget, you can use all four burners on your stove. I frequently brew 3 batches at once. Never done 4, but I could if I want to. Also, if you have limited room in your chamber, WLP530 (Belgian Abbey yeast) can ferment fine at room temperature.