Indeed the dinette converts to a double berth which isn’t that small at almost 6’ long (if you remove the backrests)
If you want to built a bunk room with two bunks the only way would be to have one bunk fairly low along the hull side and out the other one perpendicular, along the stairs. If you cut into the old cabinet there you can get close to 6’ long. Now in that setup both bunks would have enough headroom, except for the feet section of each bunk.
On my 53 I converted the dinette to a head, it s actually a pretty big space
There is a list of wasted space under the side deck