Once physical levels are gone, will racial stats start to matter?

[Eekiki]

Short does not mean weak, If lalafells were called "dwarves" we wouldn't be having this discussion.

Exactly.

And from a gameplay standpoint, there are plenty of people (like me) who want to play as a physical attacker Lalafell, just like there are people who want to be a spell-casting Roegadyn.