I think it's the opposite for most people. For a given height, shorter legs = longer torso = bigger bike, longer legs = shorter torso = smaller bike.
Although the given sizes are based on seat tube length, top tubes are longer on bigger bikes. If you have longer legs for your height, you have a shorter torso, so sizing up for leg height will likely stretch you out too much. Of course you can adjust by swapping out stems and such, but if the top tube is way off and requires an extremely short/long stem, you may end up compromising the handling.
Standover height is not all that important (and if you're 5'6", it's unlikely that any bike that fits you otherwise will be a problem from that perspective anyway, especially since most frames I'm seeing lately use compact geometry). Top tube length is a more important measurement for fit.




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