When trying to restore a snapshot, I get a "the resource you were accessing could not be found" error.

The Restore Droplet option for Snapshots overwrite’s Droplet’s data with the snapshot’s image. This error occurs when that Droplet your are attempting to restore no longer exists on your account, most likely after deletion.

To work around this error, you can create a new Droplet from your snapshot image. For detailed steps, see our Create New Droplets from a Snapshot guide.

No, you cannot downsize a Droplet using a snapshot.
Snapshot images are compressed when stored.
Create a snapshot of the Droplet, then create a new Droplet from that snapshot.