Southern Gothic writing is noted for its depiction of the bizarre or grotesque. Flannery O'Connor's work often has significantly strange characters. A more current proponent of Southern Gothic writing is Lewis Nordan. Carson McCullers, in the passage quoted above from The Ballad of the Sad Café, uses several deliberately grotesque elements in order to create a surreal and haunting atmosphere. This is done to accentuate the tragic elements of the story and make the characters instantly memorable to the reader.

In the passage you quote, three details stand out. First, Cousin Lymon is a deformed, hunchbacked dwarf. His coat doesn't fit him; it's too short, because, we can guess, the hump on his back pulls the coat upward.

He was scarcely more than four feet tall and he wore a ragged, dusty coat that reached only to his knees.

Another detail are his crooked little legs, which don't look strong enough to hold up his misshapen body. Finally, his oversized head and face are strikingly weird, though he isn't described as being ugly. Instead, McCulllers calls his eyes deep-set and blue, his face soft, but his face has become like an eerie mask, covered with dust, accentuated by the striking image of contrasting shadows under his eyes.

He had a very large head, with deep set blue eyes and a sharp little mouth. His face was both soft and sassy—at the moment his pale skin was yellowed by dust and there were lavender shadows beneath his eyes.

These are three elements of the grotesque McCullers uses, in this case to catch the reader's attention and at the same time to elicit a compassionate response to Cousin Lymon.

In Southern gothic literature, within a setting of social realism, the element of the grotesque is often prevalent.  The qualities of the grotesque often illuminate themes about the human condition because their oddities take the reader away from stereotyping and other attitudes that would impede the reader from not viewing the human experience more closely.

The description above of Amelia's cousin Lymon, who is a small man, points to his oddities. He is a hunchback, or "broke-back" as the people of the town call him.  Lymon is only four feet tall and has crooked little legs.  On top of these pitiful legs sits a "great warped chest." That Amelia falls in love with this diminutive little man, this grotesque character, points sharply to her terrible isolation.