cage, in my bedroom for night. The "sleeping cage" contained his cloud (a big frilly knot he liked to cling to when he slept) another smallish toy, a bell (for ringing, if he felt I was oversleeping), food and water.
It wasn`t a "play space" - and he knew when it was bedtime when we`d head to the sleeping cage - after the first few days, he never fought going in, would climb in happily (groggily) on his own.
After I`d put him to bed, I`d leave a nightlight on til I went to bed. Otherwise, normal noise and activity continued. He understood that the sleeping cage was "bedtime" and never threw a fit, screamed (well, as much as a parrotlet could scream... G!), etc.
It worked very well for both of us...
After a cpl years, I changed to a new sleeping cage - totally different shape. It hung in the same place and had mostly the same stuff inside. He has no transition problems.
The only thing about the sleeping cage, I insisted the bars be black instead of white... dunno that it mattered though.