Look, even a thin baby should fit in a seat! DD was quite underweight as a baby, tall and really skinny - frightfully skinny at one point (she didn't fit newborn size cloth nappies well until she was nearly a year old), but she has been in her Brio Zento since she was barely 5 months old.
And that seat is one of the biggest on the market, it should fit a 5 yo (up to 55 lbs), even if it might not fit all 5 yos, due to height!
The seat certainly is roomy, but DD has always been snugg in it. While her head might fall forward or sideways as she sleeps, he body does not move. That said, as I mentioned earlier, yes, if she really wants to she can get an arm out - but she's a bit of an escape artist.
Oh, if you could get a hold of an extended rear-facing seat, I would buy that. (DH's father bought the Brio Zento as a baby gift, as we couldn't afford it, so I understand the problem with buying another seat. But really, I'd rather borrow money to get my child a safe seat). The Brio Zento is the only one imported to NZ, so we've go that. But when we were back in Sweden recently we looked at the Britax Two-way and Akta Graco Duo-flex XTP. They both seemed very good, and DD sat really well in them.