I have not been to an audition yet. From what my interviewer told me, they call the first part of the audition a "short movement exercise," not a dance - because it doesn't require any prior experience.
I believe there are characters in every height range? However, it says on the WDWCP website that "special consideration will be given to Disney Animated Character "look-alikes" and individuals 4' 8" - 5' and 6' - 6' 3"."
I posted some interview tips on the College Program Questions thread. Good luck on your interview!