Yes the letters are the engine size. A rough approximation would be to equate them to battery sizes. Comparing an A cell to a D cell would be like comparing an A engine to a D engine. The D engine is bigger, better, faster.
I played around with building and launching a few rockets years ago. I think the biggest was about 4 feet tall with a single D engine. lol I can remember thinking, this is just a little breeze and should be no problem, and then running what seemed like forever trying to keep up with the rocket drifting on the parachute.