You should be fine. Block that sheep in with obsidian so it doesnt' get creepered.
If you progress down Aura Cascade until you can get the Fairy Ring with the Baiter fairy and then you'll just have random passive mobs spawning all around you and you'll have no trouble at all.
In other news, mining beam is awesome, but trying to dig out the dead space between three chasms into one enormous room is still crazy-slow work. I need a Plowshare nuke. >_>
But when I am done it will look awesome.
EDIT: 8th day is terrifyingly obvious when you can see a large, open, brightly lit space. Mobs and groups of mobs just start popping out of nowhere. Also I can confirm that mobs will kill passive mobs if no player is available for them to vent their frustrations on.