So lets say I have a bike that is "in theory" too small...couldn't I just raise the seat height?

Yeah, and then you'd have a smaller reach and tighter tuck. It's more aggressive that way, but perfectly fine.

A "racier" fit usually includes getting a smaller bike anyway. You'll be fine.

Not without affecting your saddle to bar drop (unless you use spacers to compensate) and the reach to the handlebar (unless you use a shorter stem)

See the section on "your inseam and frame size"

https://www.coloradocyclist.com/bikefit/#inseam

Just extend the seat post out with lots of setback. Put a long stem on (130-140) and you're good to go.

That would look so cool!

Back in the 1970s, most bikes can in only 3 sizes (21", 23", 25"). Even high end European bikes came in only these sizes. That's a 5cm difference between sizes (compared to the 1 or 2cm today). People regularly got by on bikes that were 3 or 4cm too small. Just jack up your seat 4cm higher, slide the saddle all the way back on the rails, and install an extra long stem. Some people claim that a smaller bike is stiffer and lighter weight than a bigger bike, but I'm not convinced. I'd rather have a properly sized bike to begin with.

Lets say I am regularly a 52-54, and I go with a 46. I can just jackup the seat and get a longer stem to compensate?

It depends upon how much you're willing to suffer and how flexible you are. If you raise the saddle, you increase your saddle to bar drop which effectively lengthens the reach and pushes more weight forward on to your hands. The increase in saddle to bar drop may lengthen the reach enough that it is effectively the same as on a larger bike even without a stem change. The difference, of course, is that you now have more weight forward. It's a mistake to look at fit solely by the top tube length plus stem length or saddle height.

Putting comfort to the side. Is it bad to have more weight forward, meaning, would that compromise any handling?

A bike that is too small is a bike that is not long enough, not one that is not tall enough.

Can you explain this a bit more? Do you mean that all bikes are the same height, just some have a different distance between the saddle and the handlebars?

More significantly, your shoulders, elbows, hands, neck and arms may suffer.

Yes, you can.

No. I think what Mongo is getting at is that the effective Top Tube length is more important in fit than say standover height.

Erring on the side of caution and going with a little smaller frame is probably OK; a frame that is too small is as bad as a frame that is too large.

Given a long enough seat post, any bike can provide sufficient leg extension for any rider with legs longer than those for which it is designed. But that's only part of the equation. The reach, determined by saddle to bar drop, top tube length and stem length, is the significant determinant of comfort on the bike. There are also implications on power output. You aren't likely to get the kind of complete information you seem to be seeking by asking questions here. There are lots of good articles on fitting on the net. Google is your friend.

The height of a bike can be adjusted a lot with the seatpost, but the seat should be positioned so that your knees is over the pedal spindle.

So the "cockpit" length i.e. the distance from the saddle to bars can only be adjusted by adding a longer or shorter stem.
There's a limit to how long or short a stem can be before it affects the steering.

When you're sizing a bike the important measurement is the top tube length.

The important measurement is the reach which takes in to account the top tube length, saddle to bar drop and stem length. Bikes with identical top tube lengths may have very different reaches if they fit with different saddle to bar drops.