I have a 17 month old and a 2 story house. She has slept upstairs in her babybed since we moved her when she was 10 months old. I still keep the baby monitor on downstiars in my room, though. Now....falling out the window is the least of my worries. Windows have screens and locks and they are higher up and she is too little to climb up or see out. And when I raise the windows, sometimes it is a pain for me. About the fire, chances are slim that will happen but if it does I do have fire alarms in every room and they do go off because I burned toast in my kitchen and boy were they loud and annoying. You say the step does not bother you. That is my biggest fear. My gate doesn't open up wide enough to be really steady plus I have other kids up there that get aggrevated when they go up and down the stairs and they move it and don't put it back. That is the reason that I haven't put her in a toddler bed. I still keep her in the baby bed with rails. Not sure what age I need to change.
I know you worry because you love your baby and would absolutely die if anything happened to her. That is normal. I just wanted to tell you that mine was upstairs and she is fine up there and maybe it would ease your mind. Another thing that might help too is that if there was a fire, i think that your mother instincts would kick in and you would know it. Also you don't go anywhere and leave her upstairs alone .... you don't get too far from her so if anything were to happen, you would always be able to get up there before anything happened. You really need some husband time alone in your bedroom. That is important that you still keep the intimacy. Get you a monitor and you will be alright. Everything will be ok.