Moving back home and in extremely tight quarters...I would be very uncomfortable, too. Plus, babies are hard work. Dogs are dependent pets.

All of you in one room would damper your intimacy/sex life....in my opinion. Tripping over one another, etc. - there's no room to breathe!

It sounds like the environment plus raising an infant in only one room...I would guess that initiated the current relationship problems. Are either of you introverts? I am. I love my partner but I need my space and alone time. I think your living arrangements are a pressure cooker and it's a strain on your relationship. Open communication and finding a way to have intimacy time together is important.