If you want your characters to be naked, then you can have them any height or weight you want. Clothing replaces the skin mesh (in games up to this one) so that if the character was dramatically out of size then clipping or parts of the avatar would look weird. You can see this in some clothing mods where each race has a clothing mesh and you have to choose which race you are (either in game or before you install the mod).
Most mods that change the shape of the NPC really just change the scale so that height and weight go up or down in proportion. Since the clothing changes with the scale, this works. However if you make a fat character for instance, it may very well have it's belly sticking out of the shirt, not just pushing the shirt out. Tall characters could end up wearing "high water" pants.
It’s quite doable to change body weight and height and let clothes and armor adjust to it as in this mod.
Anyone who thinks it technically can't be done is wrong. Oblivion had it modded in, and Skyrim is using the same 3D model format as Oblivion. Different sizes and weights are completely within the realm of reason, and IMO, likelihood.
Edit: http://www.tesnexus.com/downloads/file.php?id=4205
Not entirely sure how it’s done, either change the bones or use magnets, however I know that sims3 has sliders for muscularity and fat/ slim. Moders then added sliders for briast size, shoulder with and others.
Also this has been confirmed true.
Probably also height, main problem with size is animations who interact with world objects.
Know sims3 don’t have custom height for this reason. Oblivion had little of this animations, however the smith was using a grindstone.