From a more general perspective, I'm interested in how the size differential between the gods and giants is reconciled in stories where they interact, for instance in the third ríma of the Lokrur. Even if illusion were utilized to make Jörmungandr appear to be a cat, how can the world serpent fit into a hall?
Well, let's start with the obvious: where the jotuns in fact, giants? (I will be using "jotuns" for the group throughout, to have avoid confusion).
This seems likely, on at least some level; etymologically, the word means "(great) eater", so it seems like that they were always associated with large size.
Now, the source which probably is best for size comparisons between giants and gods is the story in Gylfaginning about Thor's journey to Útgarða-Loki, which he does in company of (ordinary) Loki and Tjalfi and his human servants Þjálfi and Röskva. On their way, they meet up with the jotun Skrymir, which is much, much larger than them: they in fact mistake his gauntlet for a house. This indicates that jotuns other than Ymir can be really gigantic. It also does indicate that there is no significant difference in size between humans and gods.
When they arrive at Útgarða-Loki's castle, it is also enourmous. Even Thor can not open the gate, but they manage to squeeze in through the trellis. However, when they meet the inhabitants, it is only noted that they are "big enough". Finally, as Thor is asked to wrestle with Útgarða-Loki's "grandmother", she can not have appeared to be so much larger than him that it would be impossible.
It should be noted that Útgarða-Loki is a master of illusion, so that while the sizes of the giants where probably not surprising to the party, we can not take the size of anything else for granted.
As for other pairings of gods and giants, we should first note that all the Aesir are descended from jotuns, many born by jotun mothers (including Thor). Loki is in fact seen as a jotun. A few notable examples are Njord and Skaldi, Frey and Gerðr, Thor and Járnsaxa, and Odin and Gunnlöð.
- Snorri, Gylfaginning, in translation by Karl G. Johansson and Mats Malm
- SAOB, for the etymology of giant.
- Gro Steinsland, Fornnordisk religion, for double checking details.
Norse mythology doesn't, outside of a few specific instances, actually specify the size of the giants (or the Aesir, for that matter) as far as I'm aware.
As far as other giant/non-giant matches, there's Skadi and Njord, Borr and Bestla, Freyr and Gerd.
As far as other size differentials, this varies but story, but in general, Norse mythology is rife with magic and shape-shifting that could explain most examples.
Giants are not beholden to our rules of geometry
Myths and fairy tales include all kinds of impossible things like mermaids turning into sea foam, women selling their eyes to rivers, giant castles built on the clouds, scarecrows spontaneously coming to life with speech capability, men surviving dismemberment by replacing their entire body with tin, and household objects transforming into geographic features. Absolutely none of the rules we take for granted in reality will apply here, and that is just as terrifying and wondrous as it sounds.
The inconsistent size of giants in myths and fairy tales makes them difficult to put a handle on. Nay, they defy geometry entirely. They may be described as arbitrarily large, but this size never inconveniences them when they want to interact non-destructively with anything smaller. Actually changing size is virtually never mentioned, and would not make sense in many examples where the giants perform multiple tasks at once that each require different sizes. The most extreme and telling convention I remember would be that a giant can have a wife who fits in the palm of his hand yet experience no difficulty having kids (see the book Monsters of Greek Mythology by Bernard Evslin, section "Amycus" for a clear-cut example).
The 1952 Jack and the Beanstalk movie, due what I assume were technical limitations or a stylistic choice, depicted the giant as being a tall human who had the capabilities of something vastly larger. He stole the food in the land thereby leading to mass starvation, his visits were accompanied by thunder and eclipsing the sun, and his footprints and shadow were comically huge. Although it may come off as silly and unbelievable to modern audiences what with our tendency to overthink the logic of fantasy worlds and our desensitization to expensive CGI spectacle (plus the movie was panned by critics), this movie does convey a visual analogue to how giants were idiosyncratically treated in myths and fairy tales.
In fact, the same thing applies to human heroes in myths and fairy tales. They can wrestle with giants many times their size despite that being physically impossible. For that matter, heroes can do other physically impossible stunts like splitting mountains in twain, swallowing the ocean and running over multiple different geographies in the span of one scene.
The only logical explanation I can think of is that giants and heroes are simply following non-Euclidean geometry. Space and time simply hold different meanings to them compared to us mere mortals. Naturally, this is difficult for human minds to imagine and nigh-impossible to portray in a visual medium. The movie The Ritual is probably one of the few examples that pulls this off, and predictably it is a horror movie rather than a traditional fantasy romp.