is the 2hp smaller then the three, and what gear ratio would I need for the 2hp briggs with a CVT
No. Same block and external measurements as a 3hp. The other downside to the 2hp is valve sizes. Even the 3hp has a larger intake valve and is noticeably peppier at normal speeds. *BUT!*... Your best bang for the space is a B/S 3.5hp, which is EVER so slightly larger (not enough to matter), but it packs 1 1/2 times the displacement of the 2hp. It's a beast! They seem to turn up a lot on used edgers on C/L. As far as pedals go- I don't think it's hard and fast to have to keep them. They add complication and steal space. If I were doing a TAV/ BS flathead on a bike with a 20" rear wheel, I'd shoot for a 6>1 final drive. This would give you 40mph @ 4000rpm top speed, and 9 mph at the TAV's "hook-up speed" @ 2200 rpm. Asking a BS 3.5hp to get you to 40mph is reasonable on flat ground.
Not to knock on the BS 2hp too much- (if you already have one and funds are limited, use it.) but for the same external dimensions, you're going from 2hp(6ci) to 3hp(8ci) to 3.5hp(9ci). To better illustrate this, scale up the 2hp to a small block 289ci. The comparable displacement of the 3hp would be a 374ci if it existed. WOWzers!