At a glance I'd think 50mm x 50mm is doable. It's not a huge price difference, but you might as well save a few dollars if it doesn't make everything else more difficult.
Regarding the numeric keypad, don't those keys send two-byte scan codes? That may be what's goofing things up.
Thinking more about the board orientation, I just realized that once you've made the "sandwich", you can rest the boards on their edges and it's pretty stable.
But if you did shrink to a 50mm x 50mm board, you could fit the adapter on top of the Discovery board without covering the buttons - double win!
Let me know if there's anything I can help with on the layout or electronics. I'm no expert either, but I've done a few boards now and they all worked.
If you used a switch for keyboard vs. telephone cable, I think you're right you'd need some kind of multi-pole switch. Maybe just keep it simple and use a couple of jumpers instead.
Making it only use telephone cords sounds like a fine solution to me. The auto-detection would be really cool, but I know how it can be to have people clamoring to add random extra features to your projects.
But if you want to try it, I got a pretty good auto-detection suggestion from the EEVblog forums - let me make some diagrams and post them in a bit.
