Even though the hydrostatic shock theory and several others like that seem neat, I don't think there's enough evidence to believe them.
Oh, it certainly exists, it's just not enough to be a reliable wounding mechanism at subsonic velocities. Bullets moving at 3,000 FPS produce a very large permanent crush cavity, much larger than the bullet itself. But this phenomenon doesn't begin to occur until you start pushing 2,000 FPS, and though there is temporary cavitation with lower velocity rounds, it typically does not lead to significant tissue damage except in the case of very inelastic tissue, like the liver. Most of our tissue is quite elastic, and the cavity will shrink back down after the pressure dissipates, often with little more than bruising from torn capillaries that were stretched beyond their limits.
There are a great many studies on this, and there actually are some people who present a convincing argument that low velocity rounds can produce hydrostatic wounds (Michael Courtney being the most notable at present). But then there are those of us more in the Fackler camp, who haven't seen sufficient evidence of cavitation with pistol bullets on larger animals.
All bullets do produce it, and if the elastic limits of tissue are exceeded, it tears. Shoot a bunny with a .45 ACP and you'll witness this. But people hit with the same bullet do not tear apart from one end to the other like a 25 ounce rabbit. In fact, handgun bullets are often quite ineffective, even with good hits. Similarly, despite the devastating wound channels produced in ballistic gel, real live human beings have taken high velocity rifle rounds with little effect, and certainly not 6" wide paths of tissue destruction as the gel would lead one to believe.
I do however think there might be something to smaller bullets having more penetrating abilities.
Not necessarily, and especially not on animals. A big, flat-nosed 500 gr. .458" bullet fired around 1,800 FPS will penetrate far more critter than a 180 gr. .308" bullet moving at 3,000 FPS. This is where momentum (and bullet construction) come into play. That's why dangerous game hunting is done with large bore rifles using heavy bullets, very often made from solid copper, bronze or brass
This might come into play when your shooting subsonic for thick skin hog hunting.Although I've never been hog hunting (but it is very future soon plans) A smaller bullet is going to produce more PSI and therefore more likely to penetrate the thick skin.
Hog's ain't bulletproof. The guys I go with often use .223 and .22-250. I personally am using a .350 Rem Mag, but that's because 1) I like to anchor them where they stand and 2) it's the only rifle I had that was scopeless and begging to accept my ATN Mk390 night vision scope.
In summary, there's wayyyyyyy too much involved with terminal ballistics for you to gain a good understanding in one message board thread. Heck, books upon books are written on the subject, with many contradicting each other on various points. As well, there are many a paradox with terminal ballistics, such as the fact the .223 is less likely to overpenetrate a structure than most handgun rounds, despite it's much higher velocity and energy and greater ability to perforate hard barriers.
Some of us have immersed ourselves in this stuff up to our eyeballs for years and years, and are still learning new things constantly.
Hang around here, get involved in the ballistics threads. And don't stop researching on your own!