A short one today.
For those of you who hear this phrase (meaning, of a room, ‘lack of space’) and imagine a howling Felix being mercilessly propelled through the air by its tail I am sad to say it looks as though the cat in question was in actual fact a flail-like whip used to punish no-good sailors in the Royal Navy. Space was very tight below deck, which is why the cat was always let out of the bag (to mix idioms, quite incorrectly) above deck.
In terms of the aforementioned cat in bag, the phrase dates back to market exchanges of the 1500s. At this time a sneaky sort might make a killing trading pigs by fraudulently offering up a cat for trade instead. By demanding that one’s cooperative ‘take the cat out of the bag’, one exposes a potential trick, thereby ensuring a fair trade.