I've seriously thought, as a social experiment, of starting an Otherkin tumblr where I self identify as an "Asexual, heteroromantic Steam Locomotive", just to see what reactions I get. I'm so happy I never went through with it.
Another thing about smaller races, depending on how realistic you want to get, is that they're going to be less susceptible to fall damage and similar effects, as they will have a lower terminal velocity. It'd be good to comb through the combat and movement rules to see what might not make sense for them.
It depends on the edition. In 5th edition, size doesn't come with a lot of pre-packaged bonuses and penalties apart from how much space you take up. Tiny creatures *tend* to be hard to hit, but don't get an AC bonus, for example. In Pathfinder, Tiny is more difficult to balance, but could easily be ignored, house-ruled, etc.
If they're playing alongside human-sized races, then I doubt it. If all characters of interest are that small, then you can treat much larger creatures as a different kind of encounter entirely; maybe an "environmental" hazard, or even a watered-down Cthulhu-style "this is not necessarily something you were meant to combat" kind of encounter.
LoA, have you ever encountered Spelljammer? It might be up your alley.
Honestly for a DM screen, I would use several tabs on a tablet or laptop and just put what you expect to use. If you don't have access to either of those, random loot tables for mooks and a list of page numbers for templates, spells, and common monsters is a good start. It wouldn't hurt to have generic stat blocks written up, either