You have to pick:

We'd have ten years to dig whale-bunkers and reinforce the roofs of our bigger, tougher buildings to survive the whale rain. Bad, but not unsurvivable. And we'll have a lot of whale meat to subsist on while waiting for the ecology to recover (we'll have to stockpile preservatives and the equipment for making whale jerky, or mine the vast deposit of frozen whale meat that would cover the Antarctic).

I was discussing this with some friends and one argued that the kinetic energy of that many whales hitting the earth at terminal velocity would be worse than a meteorite. It would cause tectonic shifts, volcanic eruptions (including the Yellowstone supervolcano) and a huge dust cloud that would create an unsurvivable nuclear winter.

Does this only compress your height?
After 1000 sneezes you'll be 36.77% of your original height. You'd start becoming very oddly-shaped if it didn't shrink all your dimensions.
Do the WYR Pixies magically make it possible for your body to function at extremely small sizes?

Your body stays at the same proportions and yes, the WYR pixies make you able to survive at tiny sizes.