What problems, if any, should I expect from an undersized frame, and how small would the frame have to be before these issues occur? For the sake of the question please assume an older steel diamond-framed bike with a quill stem.
I am looking for a used bicycle for commuting. I'll be on city roads and highway shoulder, mostly flat with occasional short hills or sections of packed gravel, 12-15 miles (20-25km) each way. Since there is a very small selection in my area/budget, I am unlikely to find a frame that fits just right. Information I've found so far is that a too-large frame can have unfixable fit issues as well as safety hazards if the standover clearance is too small. However, I can't find much information about how to tell when a frame is too small or what the consequences of an undersize frame would be.
It seems like a small frame could be made to fit a larger rider by adjusting the seat post and stem height and stem/handlebar forward reach, but I'm not sure how this will affect handling or durability. I'm aware of increased potential for toe overlap and the need for minimum insertion length on stems and seat posts - are there any other problems I should be aware of?