Do the teams within a challenge need to be equal in size? Would a larger team have an advantage over a larger team?

No, the teams do not need to be equal. It is the average of every game challenge played by each team. So if one team has 10 players and they each play the game 5 times…the team score is the average of those 50 games. If one team has 100 players and only 30 players play the game once…the team score is the average of 30 games. Having more people on a team doesn’t necessarily mean that team will perform better. If more people perform poorly then that will bring down their average.