I like smaller pots mostly because I'm usually drinking with myself or one other person, and I typically use small tasting cups. And I'm caffeine sensitive enough, that I'd rather not drink 150-200 ml or more of tea times 8 or so infusions. To me that's just crazy! Maybe once in a while I'll end up drinking that much tea, but only if I'm trying a lot of different teas. And pouring off tea seems really wasteful, unless maybe you're using it to nourish a smaller pot that brews the same kind of tea.
One other nice thing about a really small pot is that if you're just brewing for one or two people, it's very easy to pour directly into the tasting cups. Also, if you're drinking 200 ml of tea, presumably you can't finish it in 2-3 sips, which means that everything has cooled down by the time you are ready to brew another pot. If you're going to insist on using such a large pot, you should make sure to re-heat the pot and cups *before* you put water in it as well as after.
I don't really buy the argument that a smaller teapot has a faster pour, though - typically larger pots have larger spouts, and I've found that typically, a larger teapot can have a similar (or shorter) pour time to a smaller pot.
I think there is a certain size at which certain types of teas aren't practical to brew in a pot. I think in Cloud's puer book he recommends not smaller than 150 ml, because low grade leaves are so large that you might end up not being able to properly brew certain teas in the pot. And the same could be true for yan cha or dan cong to a certain extent. I find that 80-120ml is a pretty good range for most of the pots I use for daily use. If I'm drinking by the self, I'll use the extra tea to nourish the pot and my little water buffalo ornament.
As far as leaves not expanding, I think it's probably not enough leaf rather than too much, but in any event, try making sure you're using water *just* off a rolling boil for the rinse / first infusion, and hit the tea leaves with a lot of velocity (and from up high) for the rinse. For later brews, you should do the opposite (pour in a circle just inside the rim, from just a bit above the pot, with pretty low velocity, ending in the center).
Using a shallow dish to keep some hot water around the base of the pot may help a little with keeping everything hotter. And make sure you shower the pot with hot water after you put the water in.
Try taking a more organic approach to the times... don't time everything, just experiment and see what works. Just by feel, or by watching the way the water evaporates off the pot (or by smelling the gaiwan lid if you're brewing in one), you can get a good idea of whether the tea is ready. Worst case scenario, you brew a bad round... so you know to brew a little longer or shorter the next infusion.
When I was at BTH in Vancouver, Michael kindly showed me his version of gong fu tea, which he uses pretty specifically to refer to an exact style of brewing, not just as a general term. I've been trying to write down his exact steps, but they're pretty similar to the ones Toki (TIM on here) outlined in:
With this method, the timing is basically determined by doing a very slow pour of the water, and then by showering the cups over the top of the pot (2 at a time if there are 4 cups) - then you pour the tea. If you end up making more than 4 brews (you're supposed to stop at 3 or 4, ideally), you can pour the water into the cups, then shower the pot, thus giving you extra time without having to count.
I've been experimenting with making tea this way at work (only with 2 cups instead of 4), and I find that it is really enhancing my enjoyment of making tea, mostly because it requires my full attention, unlike my usual 'lazy gong fu' approach.
w/r/t whether you should use fresh water for each brew or not, that's a religious debate, and everyone has their own opinions. Some people say you should use up all of the water in your kettle with as few reboils as possible... others say you should add a little fresh water and then reboil. If you really want to have everything absolutely perfect, the best solution is to use a very small kettle / stove, and keep adding fresh water. But for most situations, I think it's Ok to reboil the water 2-3 times, or even keep it at crab eyes if you have an alcohol burner or hot plate.