Correct me if I am wrong but Mtgox charges a 0.6% fee per trade so it makes little difference whether you make large* or small ones. But, as you say, you do need to ensure that you make approximately >(0.6*2)% profit on trades or you will simply be slowly giving away your account to Mtgox in the form of fees.
* Large being relative here.
Yes, its the price difference between buy and sell, not the trade volume that matters. 2 * 0.6% fee translates into a minimum price difference of 1.2% between buy and sell price to reach the profit zone, if you buy at 100 you need to sell above 101.2 to become profitable, so the samller the distance, the larger (relative) the part that goes to mtgox on every trade.