One straight forward answer: Yes! Just do it! There have been many times when I have been in the process of making a film and I've been so unsure whether I could really do certain things with my limited amount of equipment/sets ect... But in the end, I find a way. Sometimes you might find that you really want to do something that you may find hard to work out, but instead of feeling that you shouldn't do that, just see what you can do with your available resources and you will find that you can do some pretty awesome effects.

Don't worry a bit!  In fact, use that to your advantage.
A smaller set can also help generate a feeling of claustrophobia and being trapped and unable to escape.

It's not about how much you have, but about how use use what you do have. For example, this was a pretty small and simple set, and as an example of what Willow Tree was talking about, my Doctor Who film only had four different wall sections that I rearranged to simulate quite a few different rooms and corridors.

Caves are even easier, as you can easily make minor modifications to the walls, and/or add little bits to the floor that can make it look completely different. And don't forget the principle of "only building what you need." If you storyboard well enough, you can build just barely enough of the set to fill the camera, which reduces set size and piece numbers, yet retains the feeling of things being really big.

Willow brought out some great lighting suggestions that I would like to echo and add to. Limited lighting allows you to get away with smaller sets by obscuring details and set boundaries. Using stalagmites to cover some of the frame could help you reduce set size. Plus, have you thought of some sort of forced-perspective tricks?

Finally, sound design will be important in conveying the idea of larger spaces without actually showing them. Have you given that much thought?

Thank you for all the comments! Thank you rioforce and Pritchard studios for sending those videos; they helped me get an idea of what I want to create. I think I will give it a try.   By the way, Pritchard studios, did you use LED's to get those rock monsters to glow? I might want to try to get some type of effect like that. I don't make my own sound effects, I just use them from freesound.com. I am considering purchasing the Blue Snowball microphone, but I haven't decided yet. Since I have some limited space, I am planning on using lots of close-ups for this animation. I like the idea for the stalagmites. Thanks for all the help!

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