Housing is either gonna be something that is important to you or it's not! I really don't see any middle ground. I know players who couldn't care less about housing and never even visit their free one room apartment and I know players who spend countless hours making their 5 room manor into a virtual castle!
Specifically, what you get when you spend more money is;
1) more room - each step up in size gives you more places to display your stuff. And long with more rooms to put that stuff in, you get a higher item capacity.
2) more storage / selling space - each increase in living space also comes with more slots for both long term (unseen) storage and the broker.
I currently have a 5 room manor for my main and even though it cost a lot of money (both to purchase and to furnish) I couldn't be happier. I have spent many hours getting things decorated and arranged just the way I like them and I can honestly say it may never be done but it's really coming along!
In addition, even though I'm an avid crafter, the 5 room has given me more selling space than I will ever need!