I tend to do the dorm thing, too, mostly for nobles and unskilled workers. Legends typically get a room with a bed, table, chair and their own workshop, though. The Noble dorm can be a 10*10 space with 30-odd masterpiece statues and beds, tables, chairs, racks and coffins piled in around them. Qualifies as Royal everything for about ten nobles several times over.
One simple point: If the penalty of having bedrooms overlap is -25% of the value, two overlapping rooms are each worth 150% of what they would be alone, assuming the double room has all the stuff you'd split between the two rooms if they were made separate and both rooms would be equal in value. Start cramming more dwarves into one room and prices skyrocket. So set everyone on the fast-track to becoming legendary and make sure to stuff all those rooms full of cabinets and coffers.
That's good...but I still don't like my dwarfs being murdered. (I got my first mood today, it was possesed..no bonuses )
If you're that worried about fell moods, it's probably worth putting Butcher's and Tanner's shops relatively out of the way and putting the nobles, fisherdwarves, soapmakers and other layabouts beds, tables and chairs near them. This way, if someone does get a fell mood, you're much less likely to lose someone valuable. But fell moods are pretty rare, and if you do get one, one dead dwarf is probably the least of your problems.