Question...
Does anyone here have any recommendations for compact, small cardio exercise equipment? Something that takes up space in use, but which easily folds away, like those treadmills that can fold up, is also an option. (No non-recumbent bikes, plz, those things hurt me!)
I'm just looking at things that take significantly less floorspace than the recumbent bikes. My current bike needs about 6' x 3.5' of space.
I'm just looking at things that take significantly less floorspace than the recumbent bikes. My current bike needs about 6' x 3.5' of space.

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There are rowing machines that can be folded and stood on one end when you're not using them.
If you have more money and wish to splash out, a Versaclimber has a pretty small footprint.
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Dunno about its precise muscle-and-joint benefits, but he definitely got his heart-rate going.
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I got it on sale, but the original price for it was about $80 about 8-10 years ago, so it wasn't cheap for such a simple machine, either!
Watch out for that kind of mechanism for resistance if you try a similar machine, and try it out for a long time in the store to make sure the resistance continues to affect both sides equally.
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Rowing machine have any appeal to you at all? There are some compact ones.
The setup you propose---bike + WII/step---sounds excellent. You can switch off, even, do 20 minutes on each.
As a source for equipment, Craig's List can be quite good. I got my Lifecycle that way.
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