I can only give you an answer from personal experience. I adopted two kittens from an animal shelter when I was living in three storey townhouse that had three floors: the main floor, upstairs, and a basement. I raised them to be entirely indoor cats. When they were 13, we moved to a small bachelor apartment. They seemed to do just fine there despite having much less space to roam around. But they never really took advantage of the space in the townhouse anyway; they mostly hung around with me. And slept a lot, as cats always do. They had no desire to go outside and didn't even spend a lot of time in the windows except perhaps to bask on a very sunny day in either the townhouse or the apartment.
As for the question of one cat or two, I deliberately chose to have two kittens for the same reasons others have given: so that they would have company of their own species, even on the occasions where I wasn't home. In hindsight, I'm not sure that was a great idea. They were initially unrelated strangers and my male kitten decided that he wanted to be the boss; the female didn't defy him so much as try to do her own thing. He got quite aggressive with her to the point where they fought quite a lot of the time and he made her quite miserable with his dominance games. After several months, she decided to give in to his will and from that point on, they got along quite well. They would lie together every day for at least a while and groom each other. (He would also try to mate with her, with her apparent consent, although nothing could happen since both were fixed.) Despite the improved relations, I rather suspect at this point that she would actually have had a happier life if she could have been the only cat in the house. I think she always wanted to be a lap cat but she only finally dared to do that once the male had passed away; before that, she didn't seem to have "permission". Sleeping was much the same; she always deferred to him and let him sleep by my chest; she was effectively restricted to sleeping no closer than my knees. After he died, she moved closer. Sadly, she died a few months after he did so I really didn't get a lot of lap time with her (and he had never tried to sit on my lap.)
I see comparable issues in my current environment. I'm sharing a house with my brother and he has two cats, also an unrelated male and female. They were a little older when he got them: the male was around 18 months old and the female was only about 9 months old when he got her a few months later. She is much more aggressive than he is and he seems to walk on eggshells when she's around. He's never tried to climb into my lap but I think that's because she's decided that my lap is for her only. The two cats had some pretty vicious fights when she first joined the family - to the point where she had him bleeding - but they eventually settled things after he apparently agreed to submit to her. Quite frankly, I think both of them would have been happier if they had been the only cat in a house.
Age difference is probably a major factor in having two cats or kittens. One of my friends had a 9 year old female, then got a female kitten. The older cat DESPISED the kitten from the first day and never stopped hating her until the day the older one died, 9 years later. The older one wouldn't even let the younger one ON my friend's bed: she was banished to sleeping UNDER the bed. In retrospect, I think my friend regretted having those two cats at the same time; she loved them both but could see that they weren't very happy to have another cat in the house. When the second one died, she got a new kitten and this time made a point of having only one. Last time I saw her, that was working really well.
Of course having two kittens or cats from the same litter is somewhat different. I've experienced that too and that seemed to go somewhat better, although even they sometimes fought. (And despite both being males, the dominant brother tried to mate with the submissive brother on occasion.)
Just my two cents worth....