Shoot, I had it all typed out and deleted it! We store sheets in the room they are needed, in a Rubbermaid container (contains the mess and keeps them clean). Either on the top shelf or under the bed. I fold the sheets into the pillowcase. Each kid has one set, and I have 2 extra sets for nighttime messes. If all 4 of them are sick or pee at once I'm in trouble! We have 2 extra queen sets (our bed size and the air mattress size).
One towel per person plus 2 more for guests. We use the bath towels for pool/beach. I have a few older, threadbare ones for mopping up water and other messes. I've learned to fold them so they all fit on one shelf in the hall/linen closet.
We have 6 small blankets for winter, I fold them and stick them in the corner of the living room, at the end of the couch where you can't really see them. In summer they go into a storage tub in the garage or shed. I have 2 or 3 larger (queen size) blankets for guests that get stored in whatever closets I can find or under beds in Rubbermaid containers. In winter we may use them ourselves.