"This room is small."
It's not about what you think is appropriate when you translate it into English. It's about what's appropriate when you speak Japanese. せまい and ひろい don't just translate in "narrow" and "wide." It's closer to the idea of being "narrow" or "tight" and "wide" or "spacious" referring to an area. Therefore, when referring to the size of a room, you would use せまい or ひろい. When referring to the size of a particular object, then you would then use 小さい or 大き.
狭い is the correct word for something describing space, as opposed to size.
There is a delightful idiom, "neko no hitai" – 猫の額 - a cat's forehead - for something very small. Or as a Japanese acquaintance used to say "cat's foreheads are very narrow". The idiom is a pun between the kanji and the sound vs that of 狭い.
I think of "semai" as cramped, and small. It's an accurate sentence and good translation. But my first thought is.... "RUDE!" Most rooms in Japan are smaller than western counter-parts. Perhaps this sentence would get a lot of use in Japan, but I think it would be insensitive to say out loud!