Since you're not at a table in a room dedicated to other purposes (living room, dining room), crafting in a closet seems like it would feel especially purposeful. If those other rooms are shared with a significant other or roommates, sequestering yourself in the closet also can mean decorative free reign. Once you're done, you get the added bonus of being able to shut the door on any mess you've made.
Even if your closet initially seems inadequate for your stash of fabric, paper, and other crafty supplies, don't give up. With some smart organization, especially the use of dedicated containers and an eye to vertical space, you'll be surprised how much you can fit in there.
Images: 1. Lovely Design 2. Michael Fine for Casa Sugar 3. Better Homes and Gardens 4. A Field Journal 5. Jason Loper for Apartment Therapy 6. Kim Rinehimer for Apartment Therapy 7. Average Jane Crafter 8. Apartment Therapy 9. Making This Home 10. Lemon Tree Creations