The easiest thing to do would actually be to move the server spawn point into the lobby of the noob hotel, wherever it is built.
The size is mostly because of the rooms provided to give people places to live and store their stuff. I suppose that multiple private beds and rooms aren't really needed, and we could simply make do with private storage without an actual hotel-style room system.
When I built it, all starting items, enchanting, and smelting were on the same floor. If they aren't now then someone has moved them. I agree that all of that stuff should be in one place.
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