Return line, can it be smaller than the feed line?

It CAN but it doesn't have to be. The size of the return line really has no effect on operation, because it's the return orifice that matters. This is why when I plump a fuel system with a return, I use a return style regulator and put it in the return line so it acts as the orifice. That way, you can use whatever size you want, including the same as the supply line and it does not matter.