Digital Coax Cable - Does the Length Make a Difference

Shorter USB cables will not be a problem. The biggest difference is that the USB clock is not used to generate the DAC sample clock on modern DACs, so any jitter introduced by reflections from the connection will not cause DAC clock jitter. 

That's not to say it will not have any impact since it can contribute additional noise, but it's likely that other noise transmitted through the USB connection will have a larger impact. And a longer USB cable provides more opportunity for noise to be picked up in this connection. 

Any optical cable that is lower cost (under $50-60) is going to be made from monofilament plastic.  While these are okay, they do also have a loss of high frequency resolution.  If you use optical, you really want a glass fiber cable.  These are definitely more expensive.  The best for the money is always going to be Lifatec ($120 / 3 feet,  or any custom length).   There are other more expensive otions (Wire World Supernova 7, DH Labs Glass Master Toslink, etc.).

I would only add, that it seems logical for D/A converter clock to be synchronized with incoming data samples (to avoid losing data).  In S/Pdif  D/A clock is adjusted to average data rate from S/Pdif while in asynchronous USB D/A converter runs at the rate of independent fixed stable clock. DAC receives data in packets (frames), places it in the buffer and signals back "Give me more (or less) in the next frame".   Synchronous USB is pretty bad since D/A converter rate depends on average rate of the data coming from computer - rate that is very uneven.  As Jaytor mentioned, USB connection has ability to inject either computer noise or ambient electrical noise picked-up by the cable.

Optical cable might seem better than coax, since it doesn't inject electrical noise and it has no transmission line effects (reflections).  The problem is that transitions produced by transmitting optical diode are slow.  Slow transitions when crossing threshold point make uneven time of level recognition if system is noisy (on either end).