I'm very very new to making mods, and am just designing my first custom home.
I have a [censored]in' stone dragon skull forge going (null is my new favorite texture ), but space is limited to add all the misc blacksmithing things, and I want to do this for a custom workbench to save space:

I have the workbench invisible right at the anvil so when I use the workbench, I'm hammering the armor on the anvil. The activators are cluttered though and it's hard to select the right one.
I want to shrink the workbench down to 1% (making me work at the same exact spot) and have a trigger set up off to the side so the " [E] Use Workbench " appears when I mouse over a specific object, such as a static workbench or static hammer off to the side. I tried setting the workbench as the link ref from a trigger primative but it game nothing happens. Do I need a custom script? No drive (or experience) to figure scripts out... Is there an easy solution?

TLDNR I want to trigger objects (such as a blacksmith's workbench) by looking at a different object entirely.

You can look at the papyrus function Activate(), or look at making a trigger and set the activate parent of the workbench to it to.

Or you could simply use the model for an anvil as a workbench. Go to my site (link in sig), see my Tutorial for a custom chair. Use the same method of using the model of an object, duplicate the blacksmith workbench, and change the model to the anvil. Dead easy

I used the exact script from your chair vid, worked like a dream: one anvil, two separate and distinct activator areas, two functions.
THANK YOU!

Glad i could help

If you want it to work with other actors, swap PlayerREF in the function to akActionRef. For followers or sandboxing NPC's.

If I change that can I still use it too?

On that note, can I make my followers do their own thing in my house? Like when I'm in my custom house they still obey me (same interaction menu) but wander about pretending to eat or lean or sit or cook.

Yep you can still use it

They will "sandbox" if they have packages that allow it, and dialogue options that allow it to.