My mom uses this idiom a lot. I think it is kind of out-of-fashion, as far as idioms go. . .

You've confused words. ;) The expression is "yea big", which (as Steve has pointed out) means "about this big". "Yea" is an older form of yes, and you do need to show with your hands. As far as I can find, it only applies to "larger/longer" words ie. yea tall, yea high, yea big (maybe yea fast and yea far). I couldn't find any example of "yea" used with the opposites (short, low, small, slow, close). Hope this helps. :)

Usually when someone says "yay big" they are comparing it to something. They will probably be gesturing with their two hands the size of the object for comparison, or pointing to something. If you wanted to be more formal you would just say "about this big".