Does room size affect volume and bass?

Carl is absolutely correct. However, the best 40Hz tone I ever heard (electronically) came from standing 27.86 feet from a big Krell pushing a big speaker in a big room!!

Since we are on the subject, if given a choice, how would you position speakers in a half catheral ceiling room? Highest ceiling height above the listener or the opposite? I have two different opinions from speaker designers. Would a half catheral ceiling be desireable as compare to a 8 ft or 10 ft flat ceiling?

Lets not get too technical.A speaker fed identical signal level will produce the same output, but the room will make a big difference, just as where you position speakers does. A small speaker that sounds thin and bright in a large room can be transformed by moving to a smaller room. Low tech demo: pick up your jam-box and walk around the house, it sounds like your changing the volume as you move closer to walls and into smaller areas. Thats why setting up speakers can be so difficult. As always try it in your room .I have heard speakers that would not play bass-lines in my room, sound fine in larger rooms. Try before you buy.

You cannot judge a speaker in isolation. That’s just not a good call. Get it home position it in your system. Then judge. 

Oof. In acoustics (as well as a lot of other areas) there's this thing called the inverse square law. Basically, SPL decreases inversely proportional to the square of the distance from the source. So, go from 1M to 2M and the SPL drops -6dB. In open space. In a real room it's more complicated. The direct sound drops according to the inverse square, but the reverberant field does not. Also, low frequencies use the room surfaces and load up like horns: freespace = 1 , hemisphere = 2X (same acoustic power into half the space), quarter space (intersection of 2 walls) 4X; eighth space (2 walls and the floor) 8X. And it's all frequency dependent. This is why speaker placement matters so much. 

But SPL at the listener's ears is a combination of direct, reflected, and reverberant levels. Here, halving the room volume, all other things being held constant, the same energy input into the room will be doubled per cubic foot, and that's 3dB. 

So, yeah, the dealer is kinda correct, but in an oversimplified way. If your room is acoustically very absorbent it might take even more power. If you load your speakers closer to room boundaries, we already covered that. At best, the answer is a qualified maybe. In any event, listening a realistic levels in a good sized room is not something most HiFi speakers will do, they just can't move the air. You need some big Klipsch or real JBL monitors - S4700 or such. Full disclosure, I've never been a Klipsch fan, and JBL L-100s are simply terrible. But the new JBLs 3900, 4700, are simply spectacular.