Leeneia, I would think that a small guitar with a 21.5" string length, unless it is very lightly constructed, would have no problem with a standard set of nylon strings tuned a full step above concert pitch.

I would never try it with the usual 25.5" string length, but since your smaller guitar sounds pretty close to the dimensions of the "terz" guitar (normally tuned a minor third above concert pitch), it sounds to me as if should work fine with no danger to the guitar.

Don Firth