There's two different measurement metrics here. On the flats, it's power-to-aerodynamics that play a role. While in the hills, it's power-to-weight ratio.

So on the flats, if you're a 60kg guy trying to hang with 70kg guys, you're at a disadvantage because the aero-drag of both is very similar. The bigger guys will have more power to cut through the wind for not much more drag. What you can focus on is drafting behind them closely and consistently enough to make up for the power differences.

Then on the hills at lower speeds where aero-drag isn't a factor, your lighter weight helps because lung-capacity and oxygen delivery is more similar than weight. Two 175cm tall riders will have similar size lungs and aerobic capacity while their weights may differ much more. Thus on the hills, you may be able to generate similar work ability (force X distance). But due to lighter weight, similar force allows you to push lighter weight over larger distances in identical time-frames. Thus, you're able to climb faster than them.

It's basic physics, people get the equations mixed up. Hills is a work-related equation, while flats are an aero issue requiring 2nd-order power equation. For example, to go twice as fast up a hill, you need 2x the power (assuming you're still not going so fast that aero-drag comes into play say.. 6mph->12mph). However, to go twice as fast on the flats will require 8x the power, like 20->40mph.