#1
I'm not sure if these are problems, but here goes.

1. My pinky is half retarded. It always wants to hide under the neck, especially when I play 5th chords. It's automatic and brings tension...

2. when I play the said 5th chords especially on lower (pitch) frets, my wrist bends near a 80-90 degree angle, which gives me occasional pains in my left arm (not when I'm playing, and not huge pain, just a little pinching)

What may be the cause of these problems...

3. The way my thumb is against the neck, it's the thumb itself that presses against the neck(the other side of the nail) when I've heard that it's the pad (the other side of the joint, the hard side that sticks out kinda) that should press against the neck.

When I play with the pad of the thumb against the neck, I feel that my pinky cant stretch up to the lower (pitch) strings, so I bend my wrist.

NOTE: I have small hands. 7 inches/ 18cm from the top wirst line to the tip of my middle finger.

Do I have wrong left hand technique or am I just paranoid?
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#2
Bad Technique.

My hands are the same size as you, I have a small bit of trouble playing, but my wrist doesn't hurt ever.

Make sure the guitar is high enough (sit in classical position, adjust the strap so the guitar hangs, and that's how high it SHOULD be)

Put your thumb past the halfway point, perpendicular to the neck. (so it points upward)

Raise the guitar while you play, make sure you dont reach your left arm down.

Relax, it helps loosen tension.

Do stretches and massages before playing, I know John Pettrucci has a video of this on youtube somewhere...

And finally, try looking at different necks, thinner ones, thicker ones, all that stuff.
#5
How do you get your pinky BEHIND the neck?! I cant imagine that...

Oh and stop doing number 2. Just stop it.

You are allowed to move your thumb to reach the lower strings, but you would move it to underneath the string you're aiming for. Make sure your thumb is always behind the neck- oh and dont press it against the neck.

Hope this helps.
#6
Correct your technique, it's not your hand length. I know girls with much smaller hands than that who can play guitar extremely well. You don't have to have Steve Vai hands, you'd be surprised at the length of some guitar player's hands.

I had bad technique with my thumb when i was first playing guitar, and that caused a lot of problems, so ease up tension there and it should help. I don't know if you are sitting or you just have your strap down to your knees, but your wrist should NEVER be at 90 degrees, fix that immediately or you will cause chronic pain and complications.

I heard the chromatic exercise mentioned, and i have to agree that you will see great improvement. The first few days will SUCK but you'll see noticeable changes in your control of your left hand.

The chromatic exercise i like is (E) 1-2-3-4, then keep your fingers still and move one at a time to the (A) string in the 1-2-3-4 pattern. Continue down every string and come back. You can figure out alterations later, but this should help your pinky.