This is a common problem in CFS & caused by what's known as a "collision bubble". This might well have been more of a problem in Multiplayer so I don't know if it's the same for Single Player. It will depend on the aircraft you're using as AI traffic & obviously the one you're flying yourself. I don't know if the same problem exists in FS2002. There were several methods of fixing this in CFS but I don't think it affects the later models created with FSDS2 & Gmax. I believe it also affected the default aircraft in CFS.

PS. If the aircraft you're using is an older FSDS model you could try patching the MDL file with Tcdfsview from the Utilities section. Set the Zoom value so the aircraft looks about the right size in the selection display window. 7 or 8 is good place to start.