theres a physical limit on the length of a patch cable - if i remember correctly to get 100 meg speeds you need the cable to be 10 meters or less - anything over that and it would default to 10 meg. i think you should connect the patch cable to join the 2 routers and have them both downstairs - it should improve the wireless range, then set them both up to be on the same subnet because most routers are on different subnets (e.g. 192.168.1.1 and 192.168.0.1 are different so you would want both to be on 192.168.1.x or 192.168.0.x) so long as both routers are on different addresses but the same subnet and that all the computers are on non conflicting ip addresses again on the same subnet you shouldnt have any problem.

another small thing - im using a 10 meter cable - it looks a lot but its not, my pc is in a different room from my router and the cable is just long enough to go the length of my livingroom then through the wall to the router - my house isn't that big either so i think a bit of planning might help.