Creating an animation pipeline to support differently proportioned characters requires some pre-planning and careful setup.
First and foremost is to ensure that your characters share the same Skeleton asset and have identical reference poses (I recommend the A-pose).
Then make sure that the Skeleton bone translation retarget settings are setup correctly. Usually the Pelvis is set to “Animation Relative”. This ensures that the height of the hips will playback correctly on characters of different heights.
The rest of the skeleton is usually best set to “Skeleton”. This ensures the bone’s translation remains at the proportions coming from the Skeletal Mesh, not the translation from the animation sequence. You will know you got this correct when your “dwarf” animation does not squash your “giant” down to dwarf proportions.
This concludes the basic “translation retargeting” setup.
From here, there are things you will have to do to “fix up” contact points. IK bones are often added to skeletons and baked to “contact” points (like door knobs) in animations that have contact in them. These IK bones can then be used as target IK locations directly in an IK Rig or Control Rig at runtime (and blended on/off as needed depending on the context).
If you are looking to copy animation to a different skeletal mesh to modify it (for example to customize your dwarf animation to look better on a giant) then you would be best served by the IK Retargeting system that can bake out new animation sequences and provide more control over how the retarget is applied.
Modular clothing remains a tough challenge. There are no magic solutions here that enable sharing of clothing assets between different proportions. There are offline solutions that can accelerate the creation of meshes for different proportions (like Wrap 3d). But this may be out of the scope for smaller teams.