I'm not the one to argue if you're right. You're right. From the perspective of the 737-300/400/500 being a new (not next) generation, the -500 was smaller than the -300. From a global perspective, you're absolutely correct.

On a different subject, whenever the 737 Classic is mentioned, they are referring to the 300/400/500 series. What's the -100/-200 series called? 737 Dinosaur?