Definitely small town for me. I couldn't live with the noise, pollution, crowds and lack of nature of a big city for long. I wouldn't want to live completely out in the sticks either though, so a decently sized city should be within at least an hours reach or so. Thankfully such places are pretty easy to find in Germany.
No, why? I take the train to the nearest bigger city maybe once a month, do my shopping/visit the theatre or whatever and go back. If anything, I'm doing the people there a favor, by not driving the apartment prices up even further by living there.
Not OP, but I'd be happy to never, ever, ever visit a city again in my entire life. As long as I can get electricity and bandwidth you can keep your "amenities." I'll take a star-filled sky.