Can I change block size or put seats in small ships?

To transfer from small to large blocks and vice versa use Rotors.

1. build the large ship/station and the small ship separately
2. Build a large rotor on a large ship/station
3. Deconstruct the top part with your grinder
4. Add a "Rotor Part" (only the top section of a rotor) to the small ship. Have the stick-part face outwards
5. Maneuver the rotor part of the small ship into the rotor of the large ship
6. Switch to the control panel of the large ship, select the rotor and click "attach"

The two ships have now merged into one for most purposes. The large blocks can have other large blocks added to them and the small blocks can have small blocks added. There is, however, a limitation: You can only control the gyroscopes and engines of the rotor-section you are currently sitting in, so you can not use this to have a control station control a small ship or a fighter cockpit control a large ship.

This youtube video shows how this works.

A word of warning though: A rotor which still has the maximum torque setting can create a jolt of enormous force the moment it attaches to a new rotor part. This can damage the ship you build and/or the surrounding. So it is recommended to reduce the torque to a minimum and put it back (for stability) after the small ship is attached correctly.