Note that particular case in Jagged Alliance 2: we certainly can play large platoon but it's a hassle to command beyond a small squad.
That's just because the gui in vanilla JA2 limits squad size to 6 mercs, so using more than that in a mission requires you to switch between multiple squads, which is a pain. Play 1.13 and you'll see that a squad of 12 works just as well as one of 6, as long as you don't move them along as a single blob and then get annoyed that there isn't enough cover for everyone.
would you rather join a lonely ugly guy, or an ugly guy that already has a few (probably less ugly) people travelling with him?
That could be implemented by party-level stats that are derived from the attributes of the party members. I like the idea, at least for an RPG where you can only recruit characters rather than generating them yourself (and maybe there's not even any stat or skill increases).
Suppose your party can have stats like fearsomeness, group cohesion, loyalty, and so on, that depend on party size, the attributes and personality traits of its members, and in turn affect conversations, fighting morale, etc. Then you would have a lot more things to consider during party building:
- Do I go big and risk some people abandoning the group at the sight of a really dangerous foe?
- Do I really want to take this guy who is an amazing fighter but will seriously upset the rest of the party?
- Alrik is completely useless for anything but diplomacy missions, but he's too well-liked in the party to replace him with somebody more capable. But wait a second, isn't he also extremely afraid of undead? Maybe I can go to the Black Marshes and grind on skeletons, if Alrik flees often enough the rest of the party will start to hate him and it's bye-bye for the useless diplomat.
- I really want this teenage witch to join us, but how do I make this work seeing how I also have a barbarian that is basically a serial sex offender? Maybe I can convince her to pretend to be a boy, or maybe there's an item I can find to lobotomize the barbarian while keeping his fighting skills. (Or maybe I'll just accept that running a single-sex party is much easier and forget about the witch.)
And these factors can also play a major role in quest selection. You might reject a quest because it is almost impossible without a thief, but your party morale is just too low right now to take on another guy, in particular one who most party members will consider likely to betray them at the first opportune moment. Or maybe you accept an easy quest just to give your group a morality boost. Or you want to recruit a character, but all the quests you've done so far have been stealthy, secret missions so your reputation is 0 as far as that guy is concerned.
It also encourages role-playing to some extent: rather than making your choices based on optimal outcome (more money, special items), you now have to also consider how your decisions will be viewed by other party members. Your paladin will want to see the necromancer executed, no matter the cost. And your rogue will hate your for declining a reward just because the quest giver told you some phony sob story. Both will think you're an idiot for seeking a peaceful solution with some savage tribe.
Now of course there's a risk of basically creating "The Sims: Squad-size combat expansion pack", but I could live with that just to see how well it works in practice to treat the party as the central object for stat optimization while the actual characters are disposable resources.