About Mario and Luigi being short I realized a couple of reasons for it. First, its a common comical effect in cartoon characters. For example, Mickey Mouse is ridiculously short. Popeye is also short when compared to tall and lanky Olive Oil. Yet he still can beat up Bluto who is thrice his size. It also represents the unlikely hero defeating the big, menacing brute.
That's very interesting you should mention that. Assuming nobody else has brought this up in the space I skipped over to post my reply, the original Donkey Kong arcade game was being developed as a Popeye game. Nintendo wanted to make a game with Popeye climbing a building to save Olive from Bluto at the top, when right before the game was slated to be released, the contract holders pulled the licensing rights. Nintendo had an 80% completed game and no franchise to market, so they took some loose King Kong inspiration, swapped the sprites around and birthed Jumpman, who we today know as Mario.