Even though this betrays all confidence I have in my short frame, size definitely matters; especially at the higher level of competition. When you have a world class lightweight going against a heavyweight with no credentials what-so-ever, then if the HW gets beaten it proves that the smaller man was a better fighter. However, if you have a World Class LW against a World Class HW or LHW, then size definitely plays a factor.
Let's put it this way: In his 3rd ever MMA fight Bob Sapp was pitted against the (then) Pride HW Champ Antonio Rodrigo Nogueira. Nogueira is no small man at 230lbs, but being pitted against the 350lbs monster that Bob Sapp is he had more than his hands full. Nogueira pulled the win on a gassed Sapp with a beautifully executed arm bar, but he was rushed to the hospital right after the fight. In this example, all Sapp had going for him was a huge weight/size advantage. What if Sapp had a much larger skill set or better cardio?
I'll touch on the dropping weight, jumping weight classes things in a sec. Work beckons!