The iPhone5 is going to carry-on the iPhone4 design. There are already tons of accessories like cases using the iPhone4 design. Why risking another re-design after the antenna-gate fiasco? The focus right now is iOS5 and iCloud. The delays are probably simply due to the A5 (heat, battery-life, clock-speed tuning, etc). Putting it on the huge iPad2 with large battery is easy, but it's challenging to put it inside a phone. Heck, Apple even had to down-clock the A4 on the iPhone 4. People can argue it's not a "revolutionary" jump, but the A5 imo is already a leap from the A4, with dual-core and a much better GPU.
The larger screen device is the next iPod Touch. Apple has been pushing the iPod Touch as a portable gaming device. Increasing its screen size makes sense as there is more screen space for touch controls. And it's an iPod, so the marketing tagline is it will be the best iPod ever to watch your movies on. Add on a 3G version, plus iCloud, it just clicks.