Babies do need a lot more sleep when they are ill. Their bodies need it to heal. Since it isn't affecting his nights, let him sleep. Once he is better, it is best not to allow too much day sleep otherwise it will start affecting your nights and we don't want that:)
I personally feel that it is much easier for both DD and me when we are in our separate rooms
But you also have your DD to think about. IIWM, I would give it a go moving him to DD's room