"Big fish eat small ones."
Translation:Velké ryby žerou malé.
That is exactly the difference you can find in dictionaries. Using žrát for people is possible, but it is mostly an insult.
Why velká ryba is wrong? Since we do not know the number of fish in that sentence.
Since it is not "Big fish EATS", we know for sure that there are more than one of them.
Theoretically yes. It could mean that the small ones of something (of the feminine gender) eat big fish. But it would be a very confusing way to say that because everyone would first understand the meaning presented here. Maybe in some very special context which is hard to imagine now.