Squeezing
In some cases, you may have to squeeze into or through an area that isn’t as wide as the space you take up. You can squeeze through or into a space that is at least half as wide as your normal space. Each move into or through a narrow space counts as if it were 2 squares, and while squeezed in a narrow space you take a -4 penalty on attack rolls and a -4 penalty to AC.
When a Large creature (which normally takes up four squares) squeezes into a space that’s one square wide, the creature’s miniature figure occupies two squares, centered on the line between the two squares. For a bigger creature, center the creature likewise in the area it squeezes into.
A creature can squeeze past an opponent while moving but it can’t end its movement in an occupied square.
To squeeze through or into a space less than half your space’s width, you must use the Escape Artist skill. You can’t attack while using Escape Artist to squeeze through or into a narrow space, you take a -4 penalty to AC, and you lose any Dexterity bonus to AC.
So in a 3-foot wide corridor, medium creatures get these penalties, while small creatures are fine.
There's nothing specific for what happens if four PCs fall into a 5 foot pit; the GM would have to improvise.
Pathfinder has never bothered with rules for things like, "Is it really possible to use a greatsword in a 5-foot corridor?" if that's what you mean by rules for weapon sizes.
Personally I'd allow a creature half as big as a human to operate normally in a 3-foot wide corridor, but you are technically correct. (The best kind of correct!)
Small creatures occupy the same space as medium creatures (1 square), so they're squeezed as well. Tiny creatures (space 1/2 square) would have no penalty.
So in a 3-foot wide corridor, medium creatures get these penalties, while small creatures are fine.
That said, improvise. Plenty of APs and modules call out areas where medium characters are inhibited but small are not. Use your judgment.
Half of 5 feet is 2 1/2 feet (see the Bestiary for Tiny creatures using half-feet to measure a creature's fighting space), so either a Medium or Small creature can act normally in a 3 foot wide corridor but counts as squeezing in a 2 foot wide corridor.
"You can squeeze through or into a space that is at least half as wide as your normal space."
At least. So yes, a halfling is squeezing in a 3' wide hallway.
A halfling can't even go into a 2'4" wide hallway without using the escape artist skill.