I also built under The Elder's alter (and above it), but mine looks more like a dance hall, since I never built anything in it except the walls and floor. You can make quite a large space under there!

I've never had any issues in my top of the Mistlands tree house either. :-)

https://steamcommunity.com/sharedfiles/filedetails/?id=2616761985

If you have an old Mistlands with trees, you can also build quite a cozy little house in the trunk of a tree. Inside Moder's alter also has quite a bit of space.