I think this has been tried a few times in multiple cities. Seattle had a thing where people lived in really tiny aparmtents (like one room with shared amenities in a public area), and there was some conflict over it but I can't recall what it was. The residents were happy, but for some reason the city and neighbors weren't.

And my personal experience is that people would in general dislike it, with a preference for a private space. I remember comments about the apartments I had when I lived in the US being "small"; I'm of the same opinion as you that a home is pretty much just a place to rest, cook, and clean up, and if I could find a smaller place with the few amenities I wanted, I would.

But that doesn't really seem to be what people are interested in, and the few smaller living spaces available are usually inflated in price due to them having been a fad at one point.

The idea of apartment ownership is also a bit different in the US versus abroad, as my partner's family owns their apartment - they can do the floors, drill into walls, remodel the bathroom, all without anyone else's approval. Such renovations are considered pretty standard and from what I'm told they're considered already as part of the cost of purchasing an apartment. The location and the space is more important than what it looks like.

Compared to apartments in the US that are pretty clear about what sort of decorating and remodeling is and isn't allowed, and the sense of home is much different.

That's true. I bought my first house (I'm in the US) because I wanted to be able to alter my living space - plant a garden, turn a bath into a shower, upgrade a circuit from 15 amps to 30. Even when there's no disputing the change is an improvement, landlords don't like it when you modify their property, and I don't really blame them.