I think I would be looking at wider than 5’ if I was in your shoes. Staying on pavement and going to 7’ allows beds to go sideways. Skip all of the “building” and just apply 2” foam to the inside walls with 1/8” Luan plywood glued on for interior hard surfacing. Get some cots for sleeping on. Make some tie-down points, and get a roof-mount air conditioner unit.
Something to watch for... many cargo trailers have plank floors, not solid. I don’t know about enclosed much, assume they are solid but still verify.
Also, don’t do anything (or very much) that makes the trailer lose its “cargo” abilities. It will be worth about $0 as an RV, but as long as you can resell as “cargo” trailer, it will hold some value.