Do people prefer a small detailed area to explore or a larger more abstract area? If the number of locations and actors was the same would rather have a couple of city blocks to explore or an entire country/world?

You cannot generalize such a question. It depends entirely on the type of game and the scale you want to achieve. Does it make sense to have a space simulator set in a world the size of a city block, or exploring a galaxy by foot, just because people generally prefer small or large scale worlds? Anything that prevents you from combining different levels of detail; vast deserts with less details, but points of interest (settlements, caves, et.c.) with higher level of detail?

On a very broad and probably meaningless statement, I'd try to go for the "large" world.
If I look back, I recall people got excited about large worlds, say Morrowind/Oblivion, the first two GTA looked extremely simple but were still considered impressive because of the "large" world.
By the way, places such as oceans or deserts are - by definition - to be devoid of detail. This is an important concept: the level of detail can be an important way to convey information to the user. Ideally, everything that is useful should stand out from the background in a certain sense.

That depends on what type of world you want. Some people may argue that a bigger game world is always better, but in my opinion it is the amount of activity in the world that gives its fun factor.

What if you made a world that spanned 16 sq miles, had 2 continents, and 8 cities? What if there were two missions: exploration and racing between cities? Sure, a massive world that spans 16 sq miles has a great wow factor and the thrill of exploration, but if there is only a few things to do then the world will eventually get stale.

But what if you had one city block with tons of content? What if you could go inside every house and shop and talk to every person in them? What if you had separate missions and items for each place and different items and stories for each person? Suddenly that small city block is much more appealing than the massive world.

In my opinion density of detail is more important than pure scale. A small town where you can enter each house and open each closet could be as interesting as a large city where you can only enter certain shops or a huge world where you can only enter cities.

The best would be to create a huge world with the density of the small town example, but even if you would do something like this, this could be still uninteresting as long as you don't put something interesting in it. So, picking out point of interest in a huge world with high detail density is much more challanging.

You are designing your world backwards: first you have to think of what you want the player to find when exploring, then distribute it at the most appropriate scales.

For example, in a FPS where exploration consists of finding doors, switches, pickup items (including keys), people, machinery, fixed monsters, and other man-sized objects, the right scale doesn't depend on the amount of stuff, but on physical parameters of movement and weapons (e.g. is this open space wide enough to dodge? Or long enough to use a rocket launcher? Are there enough streets to escape a chase by turning corners? Are they wide and long enough to run comfortably?). If the game needs large spaces, the important content will have to be diluted with empty rooms, closed buildings, and so on.

Transcendence offers several examples of clever density choice.

• A star system is large enough to require significant but affordable amounts of fuel to go from landmark to landmark.
• A star system is small enough that protracted dogfights can carry you near a rather distant landmark (or can be deliberately combined with intentional travel).
• The world is large, but you normally go back and forth within a small range of close star systems (prematurely going forward is deadly, revisiting early systems in which you have defeated everyone and bought or looted everything is a waste of time and fuel)
• Almost every landmark in a star system is valuable, either as an enemy to slaughter, a specific mission objective, a source of useful goods or a buyer of loot. Therefore most fuel is spent well.

I think much depends on who you're making the game for. I often get the impression that people have an underlying rate of encounter (especially of novelty) that makes them happy. If you use the Achiever/Killer/Explorer/etc dichotomy, for example, I'd wager that an Achiever will want a smaller world with a high density of points of interaction. That world won't make an Explorer happy because they want to have a sense of open territory with the draw being "what's over that next hill?"

LorenzoGatti mentions Transcendence, a game certainly designed for space and nethack gamers alike. I love both types of games but Transcendence is too small for me, too confining and too linear, especially when I compare it to games of yesteryear like Starflight and Star Control 2. So one size certainly doesn't fit all.