To answer the question, competition is a highly motivating tactic we use for ourselves in getting us to where we want to be in the world. Whether it be sports, becoming a better person, or sibling rivalry, this factor would definitely benefit those who live in a smaller family. Obviously you would only have a few others to jump over to be on the top, so it being the best at something would not be quite as difficult. However, in a race car race with only 3 competitors, self-satisfaction isn't quite as high when you know that you got 1st place in such a small sample size.
Self-preservation is critical for survival. Anytime you have few to look after as well as few looking after you, you begin to not only look after yourself more, but successfully take care of yourself better than being in a situation where "working for the group" is the main focus.
The mind-set and attitude the parents have is important. Their state of happiness is key with regards to the atmosphere that is set within the house. Generally, the stress-level would be lower when taking care of few kids verses many children. This is not always the case though. We have to keep in mind the individual themselves. Parents who have many kids may have more practice and become forced to pay more attention to their children's needs. However, this is circumstantial as well as subjective.
When it comes to individuality, what parents tell their children can carry only so much weight. There will come a time where the child is older and will begin to explore themselves on a much deeper level. Deeper than they could while living with family. In a small family, children may be more tempted to stay home longer and live with mom and dad, whereas the urgency to get out of a large home may be more of a priority. If this occurs, individuality may be a concern. Based on experience, those who tend to be more comfortable at home and stay at home, generally don't feel the need to move within themselves too. They sometimes even feel stuck within themselves and often times struggle with moving forward in life. Again, this is very subjective.
Staying on the topic, individuality may be a concern with large families. In a small family children can sometimes become bored easier. Because of this, they develop a deep need to discover themselves on a deep level.
Again much of this depends on many different factors, and are unbiased statements made based on experience. I hope that this was educational.