How can I build a vertical hinging stair safety rail/siding?
Why not consider that the times when you need to move big things up and down the narrow stairs would be seldom and under specifically controlled conditions. For example think of a strategy where you only have the rail open when moving furniture up and down from the loft. This strategy can put a whole different spin on the type of scheme that you could use for temporarily removing the railing. 

One approach could be to build the railing unit up in one or two sections and then bolt it into place using lag bolts or hex head bolts and T-Nuts embedded into the "mount to" frame if the stairway. 

Another approach could utilize a mounting that worked much like the stake pockets used for truck and wagon side boards. These brackets look something like this:



This picture gives an idea of how these are utilized for trailer sides:



A similar scheme could be used for your railing whereby the sections of the railing could be simply lifted up to take them out and away for the furniture moving scenario. For safety sake a screw could easily be added through the bracket into the post to prevent accidental lifting out.