I agree that it shouldn't be an issue for actual PCs during advancement. This is, after all, a game and if a halfling is capable of dealing out astonishing damage or manipulating the environment through feats of strength on a par with a larger character... who really cares why? Chalk it up to being better at understanding leverage or other factors where the character can maximize the strength they apply, not necessarily have the same raw muscle power.
As far as delineating a typical member of the race, that can easily be done with a reference to average values rather than racial minima/maxima.