Well the waves are only part of it, and smaller verse larger is only part of that. If you only care about height then closer is better. But they will be smaller more frequent and steeper wave. If you care more about comfort then further (doesn't really always mean very far) out is better. The waves might be taller, but not as steep and spread further apart and not as bouncy.
And there there is the current direction comapred to the wind and direction you want to go.
As above, the last thing you want to do is go south against the Gulfstream. Close to shore one can often find a counter current that will help rather than hinder your trip. Once you pass Key Largo the current comes more and more from the west instead of south on as off the Fla coast, so it will be a situation of wind (east generally) against the current and the seas could get up a bit. Again, close to the reef is calmer, but requires a lot more attention to keep from hitting a reef.