I don't think there is anything at this point that can convince me that Fylimar isn't a halfling in disguise and is fighting for the rights and inclusion of short races in video games.

I do hope you get Hellia in BG3 tho.

Think the issue is that majority of people and devs (unfortunately) don't take character/stories surrounding little folk seriously or as mentioned sexy enough (not every npc/companion needs a flirt option, its ok for the MC to just be friends with them.) thus leading to them being overlooked or in BG3 case replaced. And when they do include them they are treated as a joke more than not.
You got me

Yeah, I agree, that the short races are not taken seriously. Which is unfortunate, since the godfather of fantasy, Tolkien, gave them so much room and even made them the means to save Middle Earth.
But even the LotR movies didn't do them justice, the dwarves flat out became just comical relieves, the hobbits were not much better, they made Frodo the tragic hero, but made the others very goofy too and pushed the Aragorn/Arwen romance into the front and center (and in the Hobbit that unholy triangle between the dwarf, the elven maiden and Legolas - who shouldn't even be in that movie).
I only want to have a bit more diversity in terms of companion races and more interesting stories. And as much as people love their tropes - bards aren't always horny (mine never are) and small races don't speak in squeaky voices and are funny.
THough I must say, Larian didn't do a bad job with the Ironhand gnomes - Barcus was determiend and a very true friend and helped WUlbren until the end (a bit like Sam in LotR) and WUlbren turned out to be a formidable antagonist, who might come back in a later game to bite us. None of the Ironhand gnomes are portraits as comic reliefs or jokes imo - same with the dwarven sisters in Raphaels clutch; Korilla and Hope were both great characters, who could have used a bit more screentime, but weren't funny sidekicks at all.
So they can write small race characters and I'm sure, they would hav done a terrific job with Heilia.