Seriously: how many square feet would that be in real life? Guys in ultra-max prisons get more room for their 1 hour of "exercise" than that I think! Just one of the most evil and subtle details in a game full of things that are way too easy to overlook or take for granted, but if they were gone, something would be off to the point that you'd be seriously peeved.
On a more pragmatic note, filling that place to capacity, rounding all them varmints up, moving them into that little space and casting Rally (especially with enchanted gear and using both hands, but not dual casting) outside is a great way to level up Illusion!

