I like the small tarp and bivy combo, myself. There's so much flexibility in pitching it - you can really lock down the tarp for a storm or on a nice night you can set up the tarp as a backup and sleep outside it and look at the stars, bug free. I honestly don't feel cramped in my bivy, it's one of the light breathable ones from backpackinglight.com and it's no more confining than just being in your sleeping bag. If the mesh over your face bothers you, you can wear a hat with a bit of a bill to keep it off.

The REI minimalist bivy is less breathable but is a really light, awesome design and if you don't like it you can return it. I take it when I feel like being in a more durable bivy, like if I know I'm going to be hanging out in it in the evenings and will want to prop up on my elbows and knit or read.