IIRC, it wasn't until the Making of a Saga documentary that Lucas mentioned it was originally going to be Wookiees, which aired around 1985. I'm unsure if he ever mentioned it publicly prior to that.

There were over 70 little people playing Ewoks in the film. Finding an equal number of tall people to play Wookiees really should not have been as difficult. (Think basketball players!) And only the costumes that are going to be in closeups have to as detailed as Peter Mayhew's. Only a handful of Ewok masks even had any articulation.

As for creating the illusion of a large Wook army in 1983, there were ways to accomplish this with opticals, camera angles, and just clever editing. There weren't that many guys in rebel uniforms standing around at the end of Star Wars. And how many knights do you think you see charging at the end of Monty Python and the Holy Grail? ;)