Am I correct to think that Altmer see themselves as the true Mer who are unchanged in attitude and appearance from that of their Aldmer ancestors? The thing that see,s strange is that the Altmer are tall but are all the other branches of the Mer race of a medium to small height?

The Dunmer are of average height.
The Orsimer although stocky and muscular are of average height
The Dwemer ghosts were of average height
The Bosmer who may have also absorbed the last of the Ayleids were of average height
The Falmer (the Betrayed) are of average height

In addition to this the Breton who are human but have absorbed some Aldmeri genes are also of average height.

Is it possible that the Altmer have in fact evolved to be taller than the original wave of Aldmer and aren't as unchanged as they would like to think?

No. The ancestors of men and mer were giants.

Orcs are of above average height.

And again, the betrayed are actually about as tall as an Altmer, they are just constantly lurched over themselves, probably became their natural posture after millennia living in cramped caves.

The Altmer were made tall so they can constantly be bumping there heads on things like archways and chandeliers.
All this head trauma keeps the altmer race at an intellectual plateau......Just barely smarter than the other races.
If they were as tall as men or bosmer they would have un-made mundus with mana/fission bombs long ago.