The only thing room does is modify your mood positively or negatively (the green or red bars you see next to your name that represent your mood based on all those need factors). You want this high in rooms that you do things like work money objects, study, etc.... anything thats an active participation. If it drops too low it will drop your mood score and your sim will stop doing whatever it is you are doing sooner than it would if the room score was higher. Not hugely significantly, but enough that its worthwhile.
