I'm pretty sure, that if you make a rocket that's relatively small in height compared to diameter, it will most likely not fly very high and probably spin out of control. What about a rocket that is very tall compared to diameter, I would asume that this type of design prevent it from spinning out of control and keep the rocket ascending straight up. So what do you think would be the best proportions for a rocket model and how would that affect its performance?
The center of mass has to be forward of the aerodynamic center. Otherwise it will want to turn around. (That's why some rockets have fins.)
The aerodynamic cross section should be as small as possible, to minimize drag. That means you tend to fit all the works in a long thin tube. You can't make it too long and thin because then it will have no strength. Picture a soda straw as tall as a building. So the length vs. diameter is just a compromise shape.