In a 29/37 you aren't going to have a very big foot print for teritories. Height isn't going to matter when it comes to this, so there will be no difference other than more water volume = more stable tank.
Yellow Labs are a dwarf mbuna and are pretty peacefull in terms of mbuna. I would say that you could do a species tank easily in there. I'm not so sure that you would be able to do many tankmates with them, but if so they would need to be close to the same size and more important the same temperment as the Labs.