I think Ostlund's size absolutely will be a handicap for him.
Height is relative. Weight is somewhat relative. Build type is really what matters. The knock on Ostlund at the draft was that he was a small human being with a small framed bone structure. Narrower frames equals shorter bones which means shorter muscles.
Players don't have to have huge muscles to be successful in the NHL, but they have to have strong core muscles and being slight of frame substantially reduces their leverage to battle in the face off circle, on the boards, and for general position all over the ice.
I believe that is why some people envision Ostlund on the wing in the NHL.
A lot of premier offensive centers had the size, but didn't use it, and they found plenty of success, so why can't Ostlund? I think it will all comes down to team make-up and finding the right fit for players. Unfortunately, with Tage in the long-term plans at center, and him also being fairly ineffective defensively, if Ostlund is to play center here, they are going to likely need him to at least hold his own on the defensive side of the ice. You can shelter one defensively suspect center, but sheltering two is hard in this league. Whether or not Ostlund will adapt and find a way to use the tools he has to compete, or use high hockey IQ to be effective enough to play center is something we will have to wait to see.