I think that's a fair way to balance this too, I actually happen tothink that the radbolt rocket is comfortably at a good place right now, to be honest. Personally I think the only rockets that feel like they are in a good place now are the radbolt engine andthe co2 engine especially when you compare them to their alternatives at their tech levels.
The Sugar Engine in particular gives me strong "but why?" vibes, because it not only has the same problems of the hydrogen engineof negating a lot of the extra height benefit by taking up a good chunk of that with extra required modules and isslower than its alternative, but it also runs off of a potential food source in the early game, whereas co2 is strictly a waste product you're trying to get rid of anyway until you getsome slicksters and want to ranch them, but by then you're graduating to mid-game because you obviously have oil and are gearing up for a petroleum rocket. So it seems as if the gamerewardsyou with a faster rocket that can go the same distance for opting for the engine that uses your waste rather than your food. I tried starting with a sugar engine only once and felt like it was just a waste of time.
And you're right about its drawbacks too, that I forgot to mention. The main drawback of the radbolt engine is the mere fact that radbolts are pesky temporal oddities. You can't store them (except in the destination buildings), they require consistently high amounts of power, they attenuate fast, and radiation itself is a balancing game of consistency/safety vs. power.
So I like where you're going for theideas of adjusting tank size and burden, but because the hydrogen and petroleum rockets share the same tank and oxidizer modules, all of these benefits would also carry over to the petroleum engine too, no? I still feel like the hydrogen engine needs a special benefit for being so high tech, but I guess the power of the engine would just shine through more when that rescaling happens.
One final thought/idea I have is related to the small petrolium engine. I was dissappointed with this thing at first because I was trying to use it as my primary rocket for space exploration/colonization, and the minor bump in range coupled with it's sorta short limit made it not so suitable for that. However, I've come around to like this thing now that I'm using it in the end-game when I already have my massive luxury liners for comfortable long haul tripsand outpost asteroids already settled because of its sheer speed at doing simple missions.
One thing I find myself doing a lot is going back and fourth to feed the damn tree, and I mostly care about speed there because I'm overcooking tons and tons of food at home, then loading it on a rocket and just dumping at the tree. I don't have any dupes living there so I can't just send payloads, as nobody is there to unpack them, so I'm resulting to quick drop-off trips once I have a million kcal in excess or so. Just go in, drop off the food, wait for it to spit out all the resin,flow into the tungsten volcano steam room, cross my fingers I don't get any naphtha (I'm still tweaking this design), then collect the isoresin from the cooling room, alongside any tungsten. I normally would just fully automate these remote volcano planets so they just automatically shoot the metal out on payloads and send them home, but this is the only one that requires me to send something over there, because I can make way more food at home than I can on this lil outpost.
So this got me thinking, maybe we could have a mini hydrogen engine? It sounds weird at first, as its seemingly a downgrade,but bigger is not always better. By combining the engine and the fuel tank, it helps with the extra height and and burden problem. We might need a small liquid oxidizer tank, or, if like you suggested, we reduce the burden of the current lox tank to 2, this would match the height and burden of the small solid oxidizer, so then there'd be no need.It would just look weird with the big disc in the middle of a narrow rocket, but let's be honest almost all rockets we're making end up looking weird, but that's part of the charm 
.
My food delivery rocket is getting 2.3 tiles per cycle, so I'm getting close to being able to make it one way in a single cycle. Now, if there were a hydrogen variant, it might be able to get 2.5, 2.8, maybe even a full 3 tiles in just one cycle? That would be pretty neat, as it would make the higher stress from the lack of amenities less of a problem as the pilot would realistically not be in there long enough for stress to really become an issue. I also think a slight bump from the small petroleum engine to 8 tiles would be sufficient, as that would make round trips possible to pretty much any neighboring planet, and since this is a late game rocket, I think that's just fine.
Not every delivery ship needs to carry tons of dupes or megatons of cargo. Sometimes you just need something small, but you need it shipped Next Cycle Air.
