Age and dexterity

As I wrote in my introduction to this forum, I started playing the guitar and reading music in 1959 when I was 11, played in school bands and carried a guitar until the mid-70s when I stopped playing. For my birthday in 1998, the family gifted me an Ibanez acoustic dreadnaught. Due to a serious illness that lasted a couple of years, I didn't play. I'm 72 and have spent the last few months trying to play.

I can read the music and know every note on the fretboard. I can't seem to get the fingers around to play the C G E7 and similar chords. Been trying all the dexterity exercises and stretching. Also, with age, a person "shrinks". I was 5' 9-1/2 for most of my life. I'm now 5' 8-1/4 (seriously). Probably due to the illness. Nevertheless, it has been suggested I ditch the dreadnaught for a small guitar.

Any thoughts? Are there others who experienced similar issues? Any recommendations? Thanks for reading this.