I agree with Jura. You'd use "suffused with/bathed in" for pleasant experiences. The use here has a very sarcastic tone. If sarcasm wasn't your intention, then the sentence looks plain silly. If you check the etymologies of "suffusion" and "bath", you'll see the imagery is quite different.

They have the same meaning but suffused would be a slightly better choice, the reason for this is that bathed is a slightly positive word, while fetid is definitely a negative word. Suffused is more neutral and you could say that the room is suffused with a good odour or a bad. The difference between them is very small though.

No. You can say that " the room is full of a fetid odour" or more simply " The room stinks" /smells terrible