I have recently read that when subordinate clauses have a 'negative element', the subjunctive can be used to represent this. For example: 'es gibt nichts, was schwieriger wäre, als der Gebrauch des Konjunktivs' This was one of those elements of grammar that took me aback a little. It seems unusual. So, to put it in a very simple context, would I be understood I was to say "ich bin traurig, dass es klein wäre", meaning "I am sad because it is small"? And would it be possible to use the conditional with 'würden' (as I consider this another variant of Konjunktiv II) as an alternative to this type of sentence?
Ich bin traurig, dass es klein wäre.
This sentence makes no sense, because dass introduces a new fact here. Facts are contradicting Konjunktiv II.
Ich bin (nicht) traurig, wenn es klein wäre.
Wenn in contrary introduces a condition. That's compatible with Konjunktiv II. English sees this completely the same:
I won't be unhappy if it was small.
Es gibt nichts, was/das schwieriger ist.
Es gibt nichts, was/das schwieriger wäre.
Don't confuse was/das with dass. They are relative pronouns so they don't introduce new facts but explain another thing – nichts. Again, English sees it absolutely the same:
There's nothing that is more difficult.
There's nothing that was more difficult.