Longer stories are self-contained in a way that shorter ones can never be, not just in plot but characterization as well, yes!
I wouldn't say never. I've read some wonderful short original fic (hell, Brokeback Mountain is only a few pages; as a fanfic, it wouldn't be considered anywhere near long, and Ian McEwan has some really good short stories that are just a few pages, too), so why should short fanfic be unable to function on that level as well? In fact, I've read (and written) plenty of RPS AUs that are under 2000, even under 1000 words, yet don't require any canon knowledge to be enjoyed fully. Of course there are a lot that are completely useless without canon knowledge, too (I just wrote an I ♥ Huckabees fic that's a total fill in the cracks thing and thus makes no sense if you haven't seen the film), but that's by no means the case with all short fic.
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I wouldn't say never. I've read some wonderful short original fic (hell, Brokeback Mountain is only a few pages; as a fanfic, it wouldn't be considered anywhere near long, and Ian McEwan has some really good short stories that are just a few pages, too), so why should short fanfic be unable to function on that level as well? In fact, I've read (and written) plenty of RPS AUs that are under 2000, even under 1000 words, yet don't require any canon knowledge to be enjoyed fully. Of course there are a lot that are completely useless without canon knowledge, too (I just wrote an I ♥ Huckabees fic that's a total fill in the cracks thing and thus makes no sense if you haven't seen the film), but that's by no means the case with all short fic.