My MIL is a tiny Chinese woman (barely 5 foot I would say) and she gave birth to 2 big babies naturally... one of them being DP who was 9lb 4oz!

TBH I really would be questioning what your OB is saying. If that is his only reason then it really does not seem appropriate at all that he should be recommending a c/s. Sadly it seems to be happening a lot these days though.
But have faith in your body to be able to birth your baby as nature intended.
I really do not think short stature comes close to being a valid reason to have a c/s.