interior space wise, yes it is smaller, lalo na sa likod, it "feels" narrower as well...
Externally, I think they're pretty much the same, but AE111 seems higher by a tad, the length, baka yung latter models na extended bumpers ang ginamit, the short bumper versions are about the same length as the AE101 (tinabi namin dati hehe).
It's the design that makes cars look bigger (or smaller) than they actually are. Take for instance the current Accord and Camry. The Camry looks bigger, but for sure, only a few people guessed correctly. Yup, the Accord is slightly longer and wider though Camry is taller.
Going back to the topic, I don't see why the AE111's rear seats are less spacious than the AE101 despite having slightly larger interior measurements. The only thing I know is that the 111 is a stiffened body bolted-on to a chassis very similar to the 101 as a result of increasing safety standards.