My layout is 8'x4' and I've got two loops (using Hornby third radius curves for the outer line, and Hornby second radius curves for the inner line). There's a bit of space between the outer loop and the long edge of the board on either side, if that makes sense, so I imagine you might be able to get a third radius loop into 3.5' - admittedly, using
all space available! A second radius loop is probably a better idea. I think about 95% of stock (not a definite score) is designed to go around second radius curves as a minimum, so you'd be alright.
You can fit quite a lot of stuff into the middle of a round-and-round layout:
my layout thread might be useful here. I've got a smallish depot and a terminus station, all in the centre of the board - I think you'd be able to get plenty of stuff into the centre of a 3.5' wide board.
Hope this helps!
-Peter