Small private liberal arts colleges are usually much more expensive than state schools, of course. Apart from that, their biggest disadvantage for undergraduate students is probably that there isn't as wide a variety of research on campus, and it's in usually in fields that don't require a huge investment in apparatus. If you get interested in high-energy elementary particle physics, say, you'll have to go elsewhere for summer research.
However, undergraduate physics degrees aren't usually specialized, anyway. People who go into research don't usually start to do specialized work until graduate school, and often don't even pick a field until then. At the undergraduate level, the main thing is to get some kind of research experience. It doesn't really matter (as far as future advancement is concerned) what field it's in, so long as you have enough interest in it to keep you motivated.
Also, small schools can't offer as wide a variety of courses as large ones. However, at the undergraduate level you'll be focusing on fundamental subjects anyway: classical mechanics, quantum mechanics, electromagnetism, etc. The required courses for an undergraduate physics degree in the U.S. are pretty much the same everywhere.
On the other hand, as you note, classes are smaller, and it's easier to get help from professors. Your professors will get to know you a lot better, so they can write much more focussed letters of recommendation for you. And at a small school, things are usually a lot less formal and bureaucratic, at least within the department. If you want to set up an experiment or fiddle with apparatus outside of class, there's usually no problem, once you've shown that you probably won't make a mess of things, of course.
I went to a small liberal arts college as an undergraduate. My graduating class had four physics majors, a typical number. Upper-class physics majors pretty much had the run of the department. We all had keys to the labs and the shop, and could come in at night and weekends and work on things freely. I was into computers, so I spent a lot of my evenings fooling around with assembly- and machine-language programmming on a couple of military surplus computers the department had picked up (this was in the early 1970s). A couple of guys who graduated the year before I did were into lasers, and had their own lab where they built a rather powerful nitrogen laser from scratch.
After graduating, I went on to the University of Michigan for grad school. My classmates went to grad school at Indiana U (and later Tufts, for their history of science program), Washington U in St. Louis, and Ohio State. One was more a math person, and ended up in operations research. Another went into electrical engineering. The third got into technical writing (computer software manuals and the like). I teach at a small college very much like the one I started out in.
A lot comes down to the kind of enviromnent you feel comfortable with. Do you think you would fit better into a large school or a small one? Are you going to live on campus or commute? Also, at a small school, a lot depends on how well you get along with the other people in the department (both students and faculty). You won't have much choice in professors and fellow physics majors!
