Will assist on the SMALL/LARGE speaker size education as others can chime in on the Dolby Dialogue Normalization setting.
Think of bass management ON/OFF instead of SMALL/LARGE for the speakers. Internally this is what the receiver is doing. When the receiver set out test tones through each speaker and the results fed back via the microphone at the Main Listening Position (MLP) it was trying to determine the capability of the speaker as well it's frequency range in the room.
If the receiver determines that the speaker can reproduce the full range signals at reference level and thus doesn't need bass management, it will set the speaker to LARGE. How Yamaha determines this is a bit of a mystery as the general consensus is that full range represents 20Hz to 20kHz and reference level is 85dB at the MLP (which is quite loud). Sometimes, the Yamaha receiver will set the speaker to LARGE, even if you know the speaker cannot reproduce the full range signals at reference level because the manufacturer's spec clearly say so.
If your speakers are not able to do reproduce the full range signals (and you know this by checking the manufacturer's specs), then bass management is needed and thus the speaker should be set to SMALL. You'll have to manually do this in the settings of the receiver. What bass management does is split the low frequencies and pass them to a more capable sub-woofer, while the mids and highs are reproduced by the speaker. There are a number of benefits to this.
When implementing bass management (i.e. speakers set to SMALL), there is a crossover frequency (with a roll off in dB per octave, hence it's not a brick wall) where signals are split between the speaker and the sub. Generally the crossover frequency is in pairs (the exception being the center channel which is solo), i.e. FL/FR, SL/SR, SBL/SBR, etc.
On the sub plate amp, you'll want to set the crossover frequency to it's highest level or in bypass mode (i.e. LFE input) so that the receiver can implement bass management and set individual pairs (mono for the center channel) of speakers for the crossover frequency. The sub is designed to play back frequencies up to it's maximum frequency rating, so let it do that and let the receiver do the bass management.