yes there is a function - right click branch with the armour and select transform -> scale it. (or select scale vertices and only change one dimension - slightly better probably)
that may work but is a hacky yucky thing to do IMO. really the only way to properly do it is to use Blender (or other 3ds, gmax etc.) and cut the body to fit properly.
As a better than #1 but not as good as blender is to copy body part chunk(s) from a similar armour rather than the whole upper body; will usually get better result.
Pacific Morrowind