I too would prefer more elbow space, but OPs mileage may vary. Regarding ventilation, small holes won't help much. It's not just a matter of being able to breathe, poor ventilation will result to condensation building up in the inner surfaces and your sleeping bag. If you look into any better quality tent, you'll see a lot of thought went into ventilation vs. privacy vs. warmth issues. Could you make the entire rear end detachable and covered with mosquito netting? Try to come up with a design that will allow you to fully ventilate the shelter, sleeping pad and sleeping bag when you're riding. And some kind of vestibule area would be good, for cooking, changing clothes etc, when it's raining outside. A detachable tarp would be better than nothing.

Here's one more "tent on a trailer" design, by Tony Hoar (Tony's Trailers). I have his kayak trailer ("Trayak") and have been very happy with it.

I understand in some conditions it may be preferrable to have a flat bed for the tent, above ground. But in most cases I really don't see the advantage over a normal tent pitched on ground. Especially as you need a somewhat dedicated trailer. I'm also not entirely convinced the trailer-tent designs are much easier or faster to set up compared to a good quality tent.

--J