[Mal]

Going smaller or larger, as long as you keep the diameter the same will have a negligible effect on speedo and the odometer. If you increase diameter; you will likely get slightly better mileage but the computed mileage will be less because the odometer will read lower. The converse is true if you go lower in diameter; the true mileage will be less but your computed mileage will be more.

As the wheels get smaller there can be clearance problems with brakes and as they get larger there can be problems with the body.

As to what the numbers mean, the 205 is the tread width in mm, the R is for radial, the 55 is the % of the width the tires are high and the 16 is the rim diameter..... Tire Rack and Discount Tire have some really good tire discussions that will likely help you make your choice. Their recommendations are really conservative and so they will fit for sure.

This is not a recommendation and a contentious subject ..... beware. If I lived in a really snowy area and had to rely on the car to get through and were on a budget; I would get two cheap wheels of stock size, fit them with Blizzex tires or some other quality snow tire and put them on the front. I would drive very carefully with them on and put them on as late as possible and remove them as soon as possible in the season. Conventional wisdom says to fit all 4 with the best in the rear.