Små is the plural form (but not necessarily the e-form) of lille which is a irregular adjective, for example:
Den lille bog -> De små bøger
Huset er lille -> Husene er små
En lille mus -> Små mus

"de" means "the" in this sentence. I hope that helps.

de is plural. Den/det are singular

"de" means both "they" and "the" (in case of plural nouns). It is not den, because bøger (books) is plural: "den lille bog" = the small book, but "de små bøger" = the small books.