Some cars have speedo numbers inside the dials, and some outside. It's the artist's call to which is which. I do agree, that the outside numbers are good. (comparing the UGLY dials of a Toyota Tercel to the much better ones from a Honda Civic)
As far as size goes, let's face it - you're sitting down at an interior that has been scaled down 2-3x from real life. Eye to gauge distance is also increased from real life, since you have to add the distance from your eyes to the monitor TO the virtual distance from your LFS viewpoint (starting at the monitor surface) to the gauges themselves.
Unless you want grotesquely misproportioned gauges (like the MONSTER TACHS that some people enjoy putting in their cars) the gauges will have to stay a similar size. I think the numbers are of proper (and readable, at least for me) size already.
Perhaps you could get a 37" monitor so the projected view is closer to reality.
I see a market for outgauge powered gauge clusters that snap onto the steering wheel housing...