It is easy to get a legendary weaponsmith, and about as easy to get a legendary cook.
One masterwork steel serrated disk is worth 45,360 dwarfbucks. A good roast is similar value and the ingredients are even easier to get.
Beyond a point, money is not a problem in this game. That point is probably reached before you get a legendary gem setter and a decent number of cut gems.
Likewise, given that a fort can have many z-levels, it is not hard to scrape together a large area for a noble bedroom. You can use normal masterwork (or even lower quality) furniture, smooth the walls, and maybe engrave a patch. You can keep a duke happy in three 11 x 5 rooms, without much engraving (not that engraving is a problem of course), without high-value natural floors, or artifacts. It would be interesting to see how small a room could be (without artifacts or special stuff) and meet their needs.
So you can gem encrust stuff but there's no necessity now. Probably an interesting and fun thing to do if you want to go that route, but not necessary. You could decide that you aren't going to go beyond a certain size with a room, and try to fit the stuff in. Problem is that this might happen while you are still doing other interesting stuff and/or don't have the gems.
To answer the OP's question though, I save my gems until I get a legendary setter and cutter via green glass, then I start a new fort because of FPS problems.