Here is the Ellen Tracy teal swing coat styled with winter layers underneath (bulky sweater and long sleeved shirt, plus a scarf). Please pardon the wet hair!

Pics 1-6 are the regular. Pics 7-9 are the petite, which I am definitely not keeping, but I included it for comparison. I think you can tell how short the sleeves are here based on how much of the white sweater sticks out.

Sooo... the bulky layers do take up some of the excess room in the shoulders and arms (but I could definitely add a couple more layers if I wanted!) and I think the sleeves look OK now. The fit in the back is a little problematic though. I get this a lot, with longer items, where the back gets hung up on my butt shelf. The other coats I already own don't do this as much because they tend to have back vents or are cut with a princess or skirted shape (this one, although it reads as a swing shape and is very roomy, is actually quite straight cut). As you can see, the petite (9) does it too so it's not really a length issue, more an issue of my butt shelf being high and prominent. There is plenty of room in the hip, but the way the coat is cut means that the excess room is all in the front there. It's not really alterable as far as I know. Would the back thing bother you? It's obviously not an issue when the coat is unbuttoned, and it's more obvious when standing still than moving around.

I don't think a smaller size will help. The petite fits smaller and shorter and still does the back thing, plus it's lost that dramatic swing and looks rather generic IMO.