This is important to remember, here and elsewhere. He is so narcissistic that his observations about other characters or situations are very, er--let's be charitable and say "myopic".

Also, and perhaps this is more an L&T thing now, Sir Walter's ideal of feminine beauty is that of his generation, which was much more buxom, whereas Anne, having "delicate features" and being slender of build, is more in keeping with the Romantic look that was becoming fashionable in JA's day?