[00Snitch]

I only skimmed your post, but your last statements are correct.

When the pot is small, you don't mind people staying in because they will be getting bad odds to call due to the pot being small.

There is a "classic" post flying around somewhere (or it might be on ed miller's site) that illustrates this. It goes something along the lines of:

You are bb with A4o, LP limps, SB completes, you check and the flop comes A82 rainbow. sb donks. you should call rather than raise (which seems more intuitive) because at this stage the pot is only 4sb and the LP limper will be getting bad odds to call regardless of what he holds.