Hi MJ - as sort of a newbie to the whole "toy soldier thing", I find this a great topic. I have two collections going at this time: one a 1/32 scale tabletop diorama; and the other, a collection of 1/30 K&C and Collector's Showcase items.
One of the challenges; I find, is that with limited space and use of bookshelf storage is that your vehicles and soldiers get dusty really quick (esp. if you live in more arid areas). I love the freedom of placement on a tabletop dio, especially for photographing, but the dust is something to consider. I prefer not to have all my pieces coated with dust but understand that some like the aging/realism that dust creates.
I've seen many here post images of curio cabinets that I think is an excellent way to display and store your items. Glass helps keep the dust off and one can display a few pieces together for small scenes. Limitation is that larger scenes are not possible. I'm using an entertainment center to display my K&C but I know that I will eventually overtake the glass covered shelf space. Book ends are part of the expansion plan. I would seriously look into a curio if you could make the space. If you ever pursue another collection/hobby, you could use a curio for something else.
Another option; but one I have not tried for K&C, is the use of wall shelves. I use this method for a small collection of trains. I like being able to see them but they do get rather dusty. Just a thought.
It will be interesting to read other thoughts on this subject. Good luck deciding on a best method for your K&C/toy soldiers.