Road Cycling - How do you know when a bike is too small for you?

What are the problems associated with a small bike (or a bike which is too big, for that matter)? Why is bike fit so important? And can two bikes with the same size frame fit differently (i.e. you need a 52 cm of one frame but a 56 cm on another)?

Besides frame height, what other measures are important? Overall reach? Handlebar length?

standover height, top tube length are also important.

Yes two frame can be the same but also be different sizes. Some companies frame are center to center , others are center to top. Center to center is the center of the bottom bracket to the center of the top tube. Center to top is the center of the bottom bracket to the top of the top tube. So a 56 c-c can also be a 58 c-t. As far as frame size goes, like posted before, top tube length is important. If the frame is to big or small it will not be balanced. An unbalanced bike will be unsafe, will not track right,turn well and will not be stable at speed on the down hills.
Hope this helps.

There is a lot of adjustment in saddle height, so that is not so critical. You can ride a bike with a lot of exposed seatpost, and back in the 1970's the fashion was for less than 2" of exposed post.

The real difference for the rider is in length. If a bike is too long, you will be over-extended, and not be in full control of the bike. On a bike that is too short, you cant ride as low down as you want.
If you have to chose between small and big, smaller is the least worst. Small frames are lighter and stiffer than big frames, hence the fashion for micro-style frames (like Giant TCR). These micro-style frames are lower than the normal sized one, but the same length, so the riding position is identical.
Stems can be changed to compensate, but small stems make for twitchy steering, and long ones are sluggish and bendy.

The bike prior to my current OLMO (ie my first road bike) was a shade too small. When the pedals straps, the front of the plastic cages used to foul the front wheel. Not a problem when moving at speed, but when going slow and having big steering movement caused a prang or 2 until I learned to only turn right when my left foot was back (& vice versa). But when I changed the pedals to SPD the situation improved some.

Also, when I stood up on the pedals to get up a hill my knee would sometimes hit the switch of my light and turn it off!

So you know a frame is too small when your foot keeps hitting the front tyre and/or your knees bash the handlebars when you are standing to ride.

I think my current frame is spot-on for me, but there's no point me telling you what my hight & bike frame size is coz I'm still trying to figure out how frames are measured.

Stew

I like to measure a frame as a graph with the bottom bracket at (0,0). I drop a plumb line to mark the BB position on the top tube, then measure saddle nose to the mark, and bars (esp top of the hoods position) to the mark.
Provided you know your crank size, you can set up any frame of approximate size for your points of contact.

Manufacturers frame "size" is of limitted use in setting up a precise position.

The toe clip overlap you mentioned is acceptable on some racing bikes, but not so helpful for city or touring use. It tends to happen more on small bikes using wheels and cranks which are too large for the rider.

I was convinced that one of my frame was too small but with minor adjustement and replacing the headset is works just fine and feels very confortable.