for the height of Mario and the largeness of his keyblade;
its all a perception of distance, if you look his keyblade is coming out towards you, which would make it seem larger.
also, it looks as though he is bending his knees, which would make him seem shorter.
Also, after examining EGM's passed "Exclusive First Looks" (i.e. the "remake" of FFVII for the PS3 just because S.E. used the game as an example to show the power they have using the PS3) seems ridiculously fake.
Also marios rendering seems pretty off from what the other characters on the page.