So I'm not understanding what purpose the "mi" serves in this sentence. would it have the same meaning without it? I was guessing this would translate more like, "what small and beautiful ones we are."
I can actually imagine a bit forced "How small and beautiful we are" interpretation but to be fair, I could list about 5 better, stylistically varying solutions for that ("Milyen", "Mily", "Minő", "Mennyire"...)
it means the same without "mi". however,if you would say sg like this: "ők nagyok és erősek,viszont mi kicsik és szépek vagyunk" (they are tall and strong,but we are small and pretty) you need to use "mi". "what small and beautiful ones we are."-this means "milyen kicsik és szépek vagyunk!"
In this sentence, "mi" means "we." And it's true that it's not necessary because the verb tells you what the pronoun is. But I wonder if it's there for emphasis?