I once asked a friend if the small wheels on his folding bike affected his speed relative to his regular road bikes, and he gave me a technical answer that basically was no, they don't make him slower. Though I don't remember the technical part.

As for longer vs shorter legs, I guess the crank length might matter if yours are shorter than most, but I don't really know. On the other hand shorter people can have a weight advantage over taller folks, especially when climbing. I am 5'7" and will never weigh much less than 140 lbs barring serious illness.