I agree entirely with your interpretation of this passage, and am perfectly clear that Emma's nonsensical remarks do not reflect Mr Knightley's actual demeanour or motives.

Here's how I see it. Sometimes when people feel insecure or vulnerable about how others will perceive them they do cover up their insecurity with a sort of bravado, an air of affected unconcern.

The phrase striving to look taller than any body else seems to me such a very apt and pithy desctiption of the posture often adopted by someone hiding ther insecurity in this way that it tickles my funny bone every time I read it. Perhaps I have a strange sense of humour.