I played as Halfling bard Myrna Brandybuck, who was great.
[Linked Image from files.trantion.uk]

Clearly the game was intended to be played with a small character, given the number of holes they can crawl down. Although halflings are about as wide as any other race (gnomes are much skinnier), so I'm not exactly sure how that works! It also made me laugh when you get the occasional hole that only tiny creatures can fit through and she says "I'm way too big!" When I'd have expected something more like "Even I can't fit through there!" Try casting enlarge on a halfling... they end up huge!

As for the small NPCs, there aren't that many halflings and none of them captured my attention. The only ones I can really think of are the one you can rescue from Auntie Ethel, who's quite good, and Roah Moonglow who's also decent enough but a villain. Definitely the gnomes are better NPCs, and that's all of Barcus Wroot, the Ironhands, and the Gondians. I remember my opinion of Barcus going from "I must save this fellow small person" to "Oh god, you again?!" to "You're a good man really trying to save people, even if you're not very good at it."

I'm a big fan of how much the short races look like adults. I've seen a lot of art of halflings especially where they look like children, but no, in BG3 they are clearly adults but... not quite human. I never did any romance because my character was too shy to actually kiss Wyll, but she did get a hug from Shadowheart in the epilogue, which was really sweet. They could have just cut to the scene with them embracing without showing legs, but there's actually an animation of Shadowheart kneeling down. I love that, because it shows someone cared to get that little detail right.
[Linked Image from files.trantion.uk]