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iOS and all the apps are build for a specific _physical_ size. A larger screen would mean apps would need to scale (or run in an awkward smaller size) which would look terrible and be awkward to use (very large buttons). The alternative would be to ask developers to make another, slightly larger version of their apps. Not going to happen ;)

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If you mean that developers adjust pixels sizes for the finger (like "button should be no less than 40x40 points"), then it's not that strict. iPad has less points per inch than iPhone, but the standard buttons all have the same logical sizes on both devices. If iPhone 5(6,7) has a bigger physical screen, then all the controls will simply become a little bit bigger (but still smaller than on iPad, btw) and retina display resolution will still be high enough to have sharp text and graphics.

The only apps that rely on physical size are some sort of virtual rulers. When pixel size is changed, they need to be modified to adjust to that.

The apps are built for a specific resolution. As long as the screen resolution is 320x480 or 640x960, the actual physical dimensions of the screen are irrelevant.

.. or 960x1440!

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