I seem to remember Jan Jansen being a very popular party member, back in the day, and I do not remember anyone expressing any dislike of Mazzy either. Korgan with the axes was a bit of a theme for evil parties too, as I recall.
As I remember it from the Beamdog forums, that's pretty much the case yes. When discussing potential new companions for BG2:EE even Yeslick was suggested.
I still suspect the loli looking short races was an issue. Look at how the smaller races now have oversized heads, hands etc to try to take them out of the loli appeal. Not totally against the way they look now, but they could’ve balanced the proportions abit.
Not a bad theory, but seeing how Larian have no issue doing the bear thing and everyone jumping to its defense, I don't think this would have been an issue either.