The taller player has an advantage serving. More margin for error, leverage, 'easy power.'
However, there are advantages to being a shorter player (as long as they are also a great athlete with skill). Movement is the most obvious. A lower center of gravity allows for the ability to change direction quickly. Also, the ability to get to the net quickly, maintain balance and set up for the 1st volley. Now, the tall player will have the reach advantage to cover the net, which can make up for the lack of quickness and reaction time. If you can just stick your racquet out in either direction and hit volleys no matter how wide the passing shot is hit, that would give you an edge.
Laver was before my time, but based on the clips I've seen, I can't imagine anybody having a better 1st volley than Rod Laver. That being said, I agree that it was a completely different game in Laver's day.