Upload iPhone HD videos to YouTube

The movie size difference is due to the compression that iOS does, specifically to support H.264 video format. More details is available at the Apple FAQ. The information that would be of most interest to you is the "Note:" under question 2.

As to your question on whether it matters, the answer depends. If you're uploading a video to a service like Youtube and you expect your viewers to be viewing on a mobile device, then H.264 is a good choice as it's likelier to be supported by current mobile devices in the market. On the other hand, if you plan to save the video so you can edit it later, then a non-compressed video and audio format will be better as it's less "lossy" (as compression tend to trade some details for smaller file size).

There is no way you could do that, I have that problem also. You could try to send YouTube a feature request, but I won't think they will do that as Google now owns YouTube and Google and Apple aren't exactly the best friends... But you coud try :)