Plan
Scale? HO, N, On30?
Reach is a big issue. You will want to maintain reasonable access to the window for cleaning, opening, etc. As you improve reach, you will gain aisle space, a good thing.
The idea of extending the branch is a good one, and can have two purposes, longer run at same grade to gain more elevation or longer run to same elevation to reduce grade. One caveat is that you will have to shove the train up the branch to the spurs. One suggestion is to put one "extra" track or make the spurs about twice as long as the number of spots at the top of the branch. If you are going to switch it, you will need someplace to set the pulls over in order to spot the inbounds. I would add a storage/yard track at the yard to hold some cars while switching around.
Since you are intending to have steam, in the 1950's, you might want to consider a small turntable and a track for inbound coal and sand. Maybe a one stall engine house. Its a desert, you really don't need to keep anything out of the rain much. This is an odd situation, most people who model shortlines in the diesel era put in these big engine facilities and don't need them, you didn't include them and ironically could actually use them.
Buy a couple switches and photocopy them or download and print out some switch templates and play around, even on the floor, with positioning switches in the switching areas. In HO the switches are going to eat up waaay more room than you have drawn them. In N you might get away with what you've drawn.
Also give some consideration to what industries you want, the crow's foot in the lower left looks like you are maximizing the space, but if you want a specific plant it might not match the track layout at all. You also might want to think about that scene. The switch is in a "steep" grade coming around a curve. It can only be switched by a train coming up grade. If you stop, uncouple from the train and go into the industrial area, when you get back, the rear of your train will be in front of the window. You might want to move the bridge to the right of the lower main (better scenic possibilities too). Then put the switch to the industrial area just before the curve. That way you can flatten the grade at the top of the reverse loop and it will be less likely to have a run away. That will make the blob 2-3 in wider, and narrow the aisle but you can easily give up 6" to a foot of the bench on the other side. That also gains you room in the industrial tracks because it allow you to move the first "industry switch up near where the "main track" switch is now, an extra 6-12".
If you move the bridge to the other side of the lower main, that allows you to run a canyon diagonally into the corner. The lower main pierces the canyon wall at right angles and then the upper main crosses the canyon. With the current arrangement, if you extend the canyon under the bridge back into the scene you run into the situation where the canyon runs into the tunnel portal. In the front of the scene you want the scenery to be below the track, but in the back of the scene you wan the scenery to be above the track. Having the same scenery be both above and below the track is difficult to do.
