Yes, the model size has a lot to do with the in game size. You want your model to be just a little smaller than the absolute max view that Milkshape supports. I know this sounds crazy, but from the image that he's uploaded to his site the model in game will be smaller than a pixel . It's really a trial and error thing.

As for the hardpoints, read the tutorial I linked to, it's quite good at explaining how to make the hardpoints themselves, even if the orientation stuff is a little confusing. If you have the newest CMP exporter (0.2.1) you shouldn't need to worry about doing the orientations manually, it does most quite accurately.

(This site is best viewed with your eyes open)