I'm a 175 crank kind of gal.

Riding on a 165 drives me nuts.

So, my assessment is that 1 cm is definitely enough to notice!

Not sure why you have a person telling you it will cause you trouble on hills... cuz, like, isn't that what lower gears are for? Seriously, lever arm means doodly-squat if you have the optimal gear height for the slope/effort.

In my universe, where I am Queen and the world does my bidding, crank arm seems to have a lot more to do with leg function. A leg with a longer femur would probably do a lot better with a longer crank than a leg with shorter femurs. Jammin' that chainring from hip and knee flexion to extension through the arc of greatest power is going to vary with the length of femur. (the arc is going to vary, I mean; so longer femur would love a longer crank)

Try a shorter set of cranks. Save the longer ones for just in case. Be ready to change your smaller chainring for one that is smaller yet (won't cost you more than $20 or $30) to get a smaller gear height to compensate.