I would say start as you mean to go on - so if you intend to have your pup sleeping downstairs long term then start that way.
Otherwise your pup will get used to being in the bedroom and you may have problems trying to change it
A lot of people on here sleep downstairs for the first few days/week so the pup knows someone is near. Also a good idea to get up a few times to let pup out for wee etc (no fuss, just wee and back to bed) - helps with the toilet training
If you do this you may not need newspaper in the crate - I used a puppy pad though.
I found it was a good idea to divide the crate - Coco wouldn't settle at first so I put a cardboard box upended in her crate to make it smaller and put a blanket over the top. She settled much better when it was smaller and cosy like a den
Re bedding, I used a small, low sided cardboard box for a bed with some bedding in it - Coco liked to snuggle into bed rather than an open space with vetbed
Good luck with Daisy - you will have to post pics as soon as she is home