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I haven't done it yet, myself (started and then decided I had better things to do with my life...lol)...but according to trophy guides I've seen, it looks like you can do either or, as long as they're all the same size in the end. Probably easier to shrink them so you don't bounce into them as much.
My suggestion is don't make the nuts large, as it gives you less space to move in. Make them all small and its easier to navigate. I did finish getting them all and it opens up a really weird looking large nut object that you can touch to change all the nuts on that stage.
-You know you're badass if you can make the Lord of all Evil cry.