<p>Do you think that project iteration length is related to project team size? If so, how? What other key factors do you use to recognize correct iteration length for different projects?</p>

Iteration length is primarily related to the teams ability to communicate and complete a working version of the software.  More team members equals more communication channels (
Brooks's Law
) which will likely increase your iteration time.
I think that 2 week iterations, whether you deliver to the client or not, are a good goal, as it allows for very good health checks.
Ultimately, the iteration length will depend on the features you wish to implement in the next iteration, and in the early phases your iterations may jump around from 1 week to 1 month as you become comfortable with the team and the technology stack.