Forget about this part. No part of the universe is getting smaller. The problem with all these analogies is the we cannot visualise the true nature of the universe ie its curvature or expansion without there being anything for it to expand into, so we try with such things that we know such as the surface of a balloon, the raisin bread etc. This leads us to see these analogies existing in our space, therefore we can "see' the other dimensions. Which causes confusion.