1. To boot the HDF file you simply need to click "Bootable" option under the Hardfile options (once you add it)
2. There is no need to make an bigger HDF
You can just add a new empty HDF that can be as a second HD (4GB is just fine for WHDLoad). Making an System partition bigger than 2GB will give you issues so better use an extra HDF file and you're set.
Apart from that and if you wanna resize the partition (lets say 1GB) you can do it making an 1GB empty HDF, formating it, and then from a CLI:
1> copy DH0: DH1: ALL CLONE
(assuming that DH0 is your ClassicWB installation and DH1 the new 1GB partition)