Rephrase the question to how much engine displacement matters; the way you've worded it is retarded, as litres are simply a unit of engine displacement volume.
The extent to which engine litres matter is difficult because you've got bore (how wide an engine piston is) and stroke (how far it travels), which both impact the way an engine performs and its size (displacement) differently.
Similarly, you've got compression ratio, which, to simplify things, is simply about how fast the pistons move in your engine.
In modern times, because of forced induction (turbocharged and supercharged cars), high power can be achieved on quite small engines, so size is somewhat irrelevant in terms of correlation to power.
Size, does, however, matter on the intended application. Generally, as you've got a larger displacement engine, torque increases, which is why trucks and buses use giant diesel engines (diesel fuel also generally contribute to greater torque, but thats an entirely different story). Also, with all other engine variables constant, a larger sized engine will result in the engine not needing to work as hard at higher speed, which is why a lot of highway cruisers used to have big engines, this isn't really relevant today anymore with how efficient modern smaller engines are.
Don't worry about size for power. Don't get me wrong, greater displacement results in greater power and torque, but there are many ways to skin a cat. There are so many variables in an engine that contribute to power, torque, fuel efficiency and reliability that it'd be impossible for me to explain. The only people nowadays that actually give a shit about engine size are normal people that have no fucking clue: "My car is so powerful, it has a 4L engine" etc etc.
To go to your other questions, they are also complicated. Just because a car has more power does not mean it will destroy it. I would much rather a less powerful, lighter car over an overpowered piece of shit that cannot handle.