I've yet to see this problem on Test playing around with various "Heroic" characters, or in reading general chat; curiously, have you tried to...
Actually, as you can see in this screenshot, the pets do get a bit taller than your waist (this occurs after using a petamorph/metamorph illusion...
Although my wife and I run many toons together, we've only done the pet and merc naming thing for a few: My primary mage's pet's name is "Quirk"....
Separate names with a comma.