Well I have never made a worthy map in my life but I've looked at quite a few in my lifetime. For the layers of your map I was going to suggest exactly what you mentioned above, in that a map for each layer would be the way I would do it and set them next to each other on the same sheet of paper. I've also seen house plans where they have everything for the first floor in dark ink and everything representing the second floor is in lighter ink, or dotted ink, all on the same map. They seem to work out well. Or maybe you can color code it by filling in the rooms for the bottom layer a light color and then the rooms for the second layer a little bit darker shade. Maybe someone with actual map-making experience could give you some better tips!
The balcony coming out of the cliff for the royal bedroom/s sounds nice. It is different from the norm and I would definitely go with that if you still want to keep the living quarters beneath the Library and Dining Hall.