I completely agree with most of this, the halflings we have at the moment look less like halflings, and more like people with achondroplasia, which is a type of dwarfism that causes a curved spine, predominant abdomen, among other traits, some of which are present, and some aren't.

On one hand, there can be an argument for this to be a more positive, realistic portrayal of little people. On the other hand, portraying little people as separate from humans feels incredibly problematic. I personally think this is why halflings have very clearly lacked traits traditionally associated with dwarfism up to this point.

I could very easily see the current halfling model being used when a body type system is added to the character creator, at least for humans, and maybe half-elves.