Why is it that two files with identical compression settings but that differ in frame size is the same size in kilobytes?
I thought a smaller picture was the same as smaller file size.
You've answered your own question already. "Identical compression". If you set the compression to, say, 512Kbsp then you will get 512Kbytes per second, no matter what the frame size is. The tradeoff is that the larger frame size will give more detail but also more artifacts at any given compression. Smaller frame sizes let you get away with lower bitrates before the artifacts are noticeable, but also with less detail.
I ran into this same thing with framerate: I thought encoding 30 mintues of 24 fps material would give me a smaller file than 30 minutes of 30 fps. Nope. If you encode at the same bits per second, then you get the same file size. However, the quality of the 24 fps material will be better because more bits will be used for each frame.