Effect of font size:
It makes the webpage look very technical/mechanical, the smaller the size of the text, more is the content that is displayed, which means it will look as if you are trying to cram up the space with content. It would seem bland and colorless.
Always remember that when people are browsing on the internet, they are not looking to read chunks of information. They don't have the time to read a 100 word paragraph; users scan the whole page in just about a minute and then proceed on.
A smaller font size would mean lesser white space which will make it difficult for the reader to read the whole text. The graphics will look out of place with the page stuffed with text.
Effect of right colours:
Colors make the users notice your site, hence, when the user lands up on your webpage, he/she stays only if the color draws their attention. Try and avoid using cool colors like the blues, greens and whites for the simple reason that they are not eye-catching and are used almost everywhere.
Catch the attention of the users by using reds, yellows and oranges with the right font size. They are warm and happy colors and add a fresh touch to the site.
Stay away from dark backgrounds. Firstly it's difficult to read with a dark background and secondly it doesn't make for a cheerful appearance.