A polygon is made by calculating the position of three or more points in three dimensional space and connecting them together, so theoretically, you could position those points as close or as far away as you liked. There is however, the fill factor, which is the time it takes to paint those polygons in the colour you want. A bigger poly will take longer to fill, and therefore longer to draw.
According to the info I have, a poly drawn by VDP1 can be up to 2048x2048 pixels (might be 1024x1024 if I'm looking at the table wrong. Either one is, of course, big enough to fill the screen .
Also according to the info I have, the VDP1 cannot handle 500000 polygons at once (though it probably can handle that many in one second, which is really a fairly meaningless number to use; stuff should be rated by how many polys it can do in 1/30th or 1/60th of a second if anything) - the maximum number of polygons that can be drawn in a single display list is about 17,400 if I've done my math right. Actually it may be less depending on processing time, but this is roughly the limit imposed by VRAM; VDP1 stores display lists in VRAM, so there is a size limit. It's probably possible to draw more than one display list in a frame, but I don't know how long they generally take.