The length of the ferrule depends upon what you want the ferrule to be doing.
You will notice that the ferrule on the modern play cues are 3/4 to 1 inch long and are made of a (rather) pliable material. If you popped the tip off you would also see that this ferrule is very thin (1-ish mm thick). Ferrules that are long and thin are used to surround but not really support the tenon to which the tip is glued. The thinness means that they only interact with the stroke at hand when you use a lot of tip-offset, the tip is thin, and you hit it hard.
In day gone by the ferrule might have been made of ivory which is stiff and needed to be rather thick (2.5mm). Here the ferrule does interact with a significant amount of the tip it supports, as the ivory is harder than the wooden tenon. For such a ferrule, you would want a thicker tip to isolate the impact from the ferrule, or you would shape the tip farther than a dime so that you would be avoiding hitting the cue ball on that part of the tip supported by the ferrule.
A jump cue has particular needs, the tip end (and the whole cue) needs to be light, the tip is very hard, and thereby, the tip does not need a long ferrule, but conversely lightness and the tip being so stiff means that the ferrule is shorter (and remains rather thin (1.5-ish mm) but is harder material than the play cue ferrule.
A break cue has similar needs (jump cue) but more often uses a longer ferrule that is softer than the jump cue and harder than the play cue. Here, many players use only a hard or x-hard tip so that they can better control the english applied at the break. One does not need the super hard tips of the jump cue for breaking (not that there is anything wrong with using them to break). Thus, the ferrule is engineered to split the difference between the play cue and the jump cue. This allows the cue to be tuned to the players desires for breaking by changing tips.
Finally, a Massé cue will use the short stiff ferrule of the jump cue--or even a brass ferrule for nose weight while retaning the stiffness and fully support the tenon under the massé strikes the tip will encounter. A tip more on the order of a play cue tip (hard) is used to impart as much english as physics allows. Here, the ferrule actually supports the tenon.
Back to tips. Given a tip of known hardness, the thinner it is the harder it plays and the thicker it is the softer it plays. This is a simple fact of compression contact forces. A thick piece of rubber feels softer than a thin pices of the same rubber at force levels well inside the rupture limit.
If you have a hard ferrule you can soften the effect of the ferrule by shaping the tip such that the forces are delivered to the shaft via the tenon and not via the ferrule (dime radius or shorter).
Now on to the topic of tip-mass. The weight of the last few inches of the cue have profound effects on the way the whole stick plays. having a low end-mass creates low cue ball deflection. Conversely, high end-mass promotes lots of cue ball deflection. So, after having the shaft turned down (11.5mm), or drilled out (314, Z), and placing a thin not-so stiff ferrule on the end, the last increment in performance comes from making the tip, itself, as low in mass as possible. Believe me, if a thick tip played as good as a thin tip, the pros would be playing tips that were quite thick.
The amateur probably optimizes his/her costs by leaving the tip as long as possible for as long as possible; shaping the tip as needed. As your skills progress, you may fnd that you like the play characteristics of the tip when it is thin (or thick) and not so much in the other condition. This is a sign that you are using the wrong hardness tip. If you end up liking the play of the tip while it is thick, you might want to try a softer tip, if you like the play characteristics of the ti when it is thin, you might want a harder tip.