It's certainly not unheard of-and on the London waterways, I think quite a number of people live on boats of sub-25ft-one guy I know via FB on a 16ft one. I am sure there are forum members who have lived on 25ft and less boats because it's come up before, but I can't recall who they were offhand. Those few extra feet to get a 25-27ft boat will make a lot of difference though.
You will have to think about not only if you will have space for everything you need-small boats don't always have things like a shower, proper oven, that sort of jazz, as well as stuff you need personally, including mobility aids-but also how much space you will find ok to live in and not be claustrophobic or get cabin fever. Not such an issue in the summer, but long nights in the winter maybe, or if your partner goes through a bad phase and can't really go out, or when it pisses rain for days on end. Times like that, you won't be outside so much and might find it a pain, particularly if most of the boat is taken up with wet clothes and boots etc., trying to dry. Do you still have a dog? That's another potential challenge.
Also, I get your point about the hills, but in some areas, parts of the towpath can be virtually inaccessible by wheelchair. Either there are steep steps up and down to the canal, or the surface is just impossible for wheels due to the width or surfacing-particularly in the winter when large parts of it become a quagmire that is barely passable on foot.
Other issues might be things like, how small the water tank is likely to be, if you will have enough counter space, will it do your head in after a while having to turn a table into a bed every night-that kind of thing. You are likely to still need an engine or genny in the winter, even with lots of solar, and you will be limited in terms of roof space for enough solar on a small boat too. I have 3x 120w solar panels and am a very light user-laptop, fridge, water pump, phone charger, that's pretty much it-and I still need to top up for at least three months of the year. That's without any bells and whistles like a TV, microwave, dishwasher, washing machine etc.
Some folk will tell you it would be a nightmare and you can't do it, but that is the answer for them personally, not for you. Plenty of people won't have it that I can really live on a 30ft boat happily despite it being fitted out to ensure it was comfortable for me to do just that, and that I am now in my sixth year... Although that is me on my own, in order to live with someone else comfortably I'd probably want more space-an ocean liner would probably be just about tolerable in that respect.
There is a lot to bear in mind, and some problems may not become apparent until/unless you try it for a year, but it may be doable for you, once again, depending on you.