Nowadays one individual can run a hosting company and manage 100+ clients all by himself, so where do we draw the line of a small company being small?

The problem with very small companies (1-2 person operation) is in speed of technical support you are receiving. If the server goes down and all 100 clients send in a support ticket, how efficient can that person really be in responding? With larger companies, you have an infrastructure with more personnel with well defined tasks, who can be a lot more accommodating during the worst times of a hosting provider.

In the world of web hosting where customer support is the ONLY differentiation factor between firms, being able to be big enough to serve all customers efficiently is what essentially will make those customers stay.