Yeah, this game plays with perspective a bit to make in-game spaces seem bigger. Limsa looks smaller out in La Noscean field zones so that it looks further away; same with Coerthas and Ishgard.

Barely any games try to represent a place in terms of actual size, because the place they're depicting is usually too big for both a developer to plausibly make and for a player to actually enjoy traversing, and it's usually fine because, frankly, we'd get kinda bored with a real-world scale. Yeah, you might think 'the wonder is ruined' by the world not being very big, but my eyeballing of the world map says that the island of Vylbrand would be somewhere near the size of France. And I'll tell you right now, I don't want my dailies and gathering to involve traversing all of France.