Also, another issue this size progression will bring up is that it makes 'canister' launchers (ie. a missile containing other missiles as second stage, and no actual range/etc on the first stage) very attractive. If a Size 9 launcher is 3 HS and a Size 3 launcher is 1.73 HS, then it becomes extremely attractive to design size 9 'canister' missiles containing 3 size 2.95 (or whatever the exact size ends up being) missiles inside, getting vastly higher salvo density (~6-6.5x) and ultimately doing nothing to actually change the small vs large missiles issue, just shifting the meta for how it is done.
Yes, that is a very good point, especially if you start designing really large missiles. Size 36 is only 6 HS - 2x larger than size 9 - and you get 4x more sub-munitions.
EDIT - I don't see an easy way around the above, so what is needed is some capability that requires internal space and is a reasonable alternative to a larger missile wave. Onboard ECM/ECCM is already an option. Perhaps other warhead types could be added. Laser heads that attack from a specified range depending on warheads size and laser tech, or shaped charge warheads that are larger than normal but with improved penetration, or Tandem-charge for a similar effect. Maybe missiles with retargeting capability if they miss, or some form of evasion capabilities, or missiles with electronic damage similar to microwaves (that require large warheads). Perhaps it's time to revisit EW and add jamming and counter-jamming. Open to ideas.
On the warhead type musings;
You've already mentioned Laserheads, which I would personally love to see return as a mid-late tech option (maybe even Casaba Howitzers as an earlier tech alternative), maybe with a bit more customization that before (maybe porting some of the ideas from Newtonian with regards to accuracy/scatter etc) and some design choices to make regarding detonation distance/accuracy/etc. A 'penetrator' warhead option that turns the missile profile into something more akin to the railgun one would also be welcome. EMP warheads (potentially capable of engaging from outside final defensive fire like laserheads) are also an interesting idea.
A couple of thoughts, shooting somewhat from the hip here but I can refine these a bit when I have a bit more time (or someone else will if theres anything usable...), heres a couple of thoughts, along with my general perceived impact on balance from them. Ordered from pretty tame to 'out there'.
Adjust Launcher Sizes - Fundementally part of the logic behind this original proposal is good, so perhaps a general reduction in baseline launcher sizes to 75% of current would allow for slightly higher salvo density. Box launchers could stay their current size. (ie. Full Size would be new 75%, 80% would be 60%, 60% would be 45%, 40% would be 30%, 30% would be 22.5%, Box would be 15%). This would buff missile launchers overall vs alternatives, and box launchers less so, but do little about the missile size issue.
Altered Reload Rate Calculation - Making the missile reload rate calculation even more non-linear (or even fixed) with size would help larger launchers in non-box configurations as it would make large missiles still capable of producing decent follow up salvos. Potentially this makes the reload tech somewhat less attractive, so one option could be to double the baseline reload of everything to begin with, though this would obviously hurt missiles vs other weapons early on.
Avionics/Guidance MSP Requirement - Adding a fraction of MSP reserved to represent avionics and basic guidance systems could be a way to make large missiles more space efficient overall. If for example this avionics used up 0.2*(Missile Size)^0.5 MSP (ie. 0.2 on S1, 0.2 on S4 and 0.3 on S9), then smaller missiles would be less attractive. This could have some tech progression to reduce it at fairly large RP steps (ala Gauss RoF). Potential downside is this might make submunitions less viable. Overall would nerf missiles in general, but in particular small ones.
Altered Engine Efficiency Progression - Making the missile engine fuel efficiency curve more harmful to small missiles by for example moving the current 'baseline' from 2 MSP to 4 MSP would penalize range and/or speed on missiles smaller than that. This would probably not affect fighter or other short ranged missiles or submunitions too badly, but make long range S2/3 missiles less viable.
Missile HTK - Offering missiles some degree of fractional HTK as a progression of size would potentially make large missiles more attractive depending on the scaling. As an example, for example additional step of 2 beyond size 2 missiles gained 0.1 HTK (ie. S4 = 1.1, S8 = 1.3, S12 = 1.5, S20 = 2.0). This would mean hits with only 1 damage like typical AMMs would roll to see if the missile is actually destroyed. Potential issues include altering gauss vs laser balance (though this could be fixed by just saying 'gauss does 2 damage in final PD fire').
Missile Armour - Same as above, but deliberately using MSP to achieve the same effect within some limit. Similar issues.
Missile Penetration Aids/Decoys - Option to spend MSP to include decoys and penetration aids carried by the missile, which could work something like requiring 0.5*(Missile Size)^0.5 MSP to carry (ie. 0.7 for S2, 1 for S4, 1.5 for S9). Potentially multiple could be allowed (possibly limited by tech). Size could also be reduce with tech slightly. Each decoy carried would essentially present a false target to PD/AMM fire until destroyed - such that a shot against a missile with 1 decoy has a 50% chance (potentially also a tech progression thing) to hit the decoy, after which it would be destroyed. Potentially different effectiveness vs AMM or PD fire might be required. Effect potentially reduced by ECCM and/or enhanced by missile ECM.
Missile Reduced Cross Section - Offshoot of cloaking technology, allow spending MSP to reduce apparent size of missiles (to a far smaller degree than cloaks) for detection purposes. As an example, spending 0.5*(Missile Size)^0.5 could allow reducing it to half of the effective cloaking technology reduction (So at 90% cloak, it would reduce missiles to 45%, the fraction of cloak % given by this could also be a tech progression, as could the size needed). This is of course largely pointless for small missiles as they are already below the size 6 threshold, but could be interesting for larger ones.
Missile Guidance Channel Limits - When designing MFC, they would be designed with the capability to control a specific numbers of missiles - this number can be altered at the cost of a larger MFC (ideally being slightly more effective to concentrate capacity in one FC vs two split ones to given tradeoff between redundancy/space efficiency) and would potentially have a tech progression line to go with it. As an example, the baseline amount could be 4 missiles per FC, and for the cost of doubling this capacity would add 50% to the FC size, and so on. If a FC finds itself controlling more missiles than its limit, the accuracy (and potentially how easy they are to hit by defensive fire) of those missiles degrades in relation to how many over the limit you are (unsure if this would be linear or not). Potentially a checkbox in the combat page to instead 'discard' missiles if over its control limit. Missiles which have internal sensors, once they acquire a target on those sensors, would count at reduced capacity against the limit, or potentially not at all (though this latter option would invite even small missiles with no sensors). Missiles could also be given 'additional avionics' internally to reduce how much channel capacity they take up, at the cost of MSP (either fixed or scaling in favour of larger missiles). This change would potentially hurt box launchers quite significantly, or atleast require ships to be more seriously designed around very large salvos. Potentially if more advanced ECM/Jamming is added later it could have some interesting interplay in this regard. I realize one issue with this is how to handle the 'stream' of missiles from regular launchers, so potentially some way of differentiating missiles 'enroute' vs 'in attack phase' (and thus requiring more active guidance) might be needed.
New Launcher Type - Rotary - If box launchers are our 'VLS' equivalent, and regular launchers are something akin to either internal torpedo tubes or the 'arm' launchers of early missile ships, a potentially distinct type of launcher could be added to the mix, namely rotary or revolver launchers in the vein of those carried by some strategic bombers. These would function as a regular launcher does, except with 2 changes - their delay between shots would be reduced compared to regular launchers (this is somewhat redundant if the altered reload rate above is taken under consideration), and they have an internal capacity after which they must reload for a longer period (unsure if from magazine or via maintenance facility) to restock their internal tubes. No specifics on this as its a bit of a stray thought.