I don't think the Heartlands is that "small", though. It's about as big as New Austin and Rio Bravo from the old game put together (looking at the mashup old+new leaked map). The desert portion alone might be small but I could see it fitting in. A good chunk of what we've seen of the Heartlands is the north, west, and east ends. There always seems to be hills blocking these areas off from the south/central part. Using the leaked map you see Horseshoe Overlook as massive cliffs and we know from the first trailer there are pretty big [grassy] hills south of the Kerosene/Tar and oil fields. I could see the desert being squeezed in there east/southeast of Horseshoe. Where the leaked map has "Larned Sod" marked is north of where I think it is. Dewberry Creek is east of where I think it is.
Side note: Google informs me that "Larned" is a real place in Kansas (basically north of Texas). No idea if this will be related in some way.
edit: here's a pic...
Also, if we can flesh out these villages enough we could make a "tour" and show off these areas (BS some details based on what we've seen). I'm sure Rockstar will beat us to the punch, though, by the time we get enough info.