Generally the package is big enough to get all the connections out at a scale that won't irritate manufacturing.
There are tiny packages though, NXP (one of the ARM builders) has a 2mm x 2mm package with a similar ARM in it, but they can only get 16 pins out at that scale, 4 are power and ground, one is clock leaving you 11 pins to rule the world. (data sheet: http://www.nxp.com/documents/data_sheet/LPC1102.pdf)
There are tiny packages though, NXP (one of the ARM builders) has a 2mm x 2mm package with a similar ARM in it, but they can only get 16 pins out at that scale, 4 are power and ground, one is clock leaving you 11 pins to rule the world. (data sheet: http://www.nxp.com/documents/data_sheet/LPC1102.pdf)