12' x 16' is rather small, my shop is about 4.3m x 7.1m (14' x 23') but I've got the added handicap of being under ground with only a "Hatch" entrance.
Do you have the added option of opening a door and rolling some tools outside, on a nice day?
If you plan on buying rough lumber and dressing it, you will need both a planer and a jointer. What kind of work are you thinking of doing? A good 6" jointer and a lunchbox style planer should do most of what you would want to do. I'd think a 12" lunchbox planer would be easy enough to deal with, when in use, put it on top of your table/workbench, when not in use, under the workbench or on a shelf. The jointer can be set up to slid under a table or bench along a wall, so it is out of the way when not in use.
What do you mean about that Router as a jointer? I've seen some set ups that use a long router bit as an edge jointer, but honestly, I'd not bother with that, if you have a half decent tablesaw, and a good blade, you can make cuts that will be just fine for glue ups.
Do you have a tablesaw, or a bandsaw?
Best of luck, we will try to answer any of your questions, and to help us help you, pics of your shop would be good.
The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
William Arthur Ward