>>does the 3.5" form factor have something to do with the limitations of spinning rust tech?
There are issues. As the platters get bigger they get wobbly, more probe to vibrations. The difference in platter speed between the inner and outer 'rings' of data also increases. There is no hard reason for 3.5 over 4.5 or 4.8 inches, but the advantages of going bigger do not outweigh the practicalities of trying to push a new form factor for a commodity product.
>> spinning rust
This is a common refrain, but seagate and the others are proving that HDD tech is not 'rusting'. With lower per-TB costs, and phenomenal reliability numbers (<1% chance of failure per year) HDDs are going to be around for a while. Outside of the datacenter, most users are more limited by more by network speeds than storage speeds.