Small aircraft are only useful for very small destinations or highly limited runway space. I personally use them for what they are used for IRL, i.e. tiny airports in the Caribbean from short ranges like SXM-EUX with a PC-6.
I only recommend using them for such small routes if you have a lot of time to run through the routes and work each one individually. Like you mentioned, they barely scrape a profit, this is totally normal. The best way to make money with them in my experience is to not have IFE on board and to use scam IFS (I hate using scam IFS). They also need to have very, very high utilization to earn a decent profit (keep in mind this is all relative). Each individual type of small aircraft has its economic sweet-spot (routes not to long where fuel is too expensive and not too short where ticket prices are too low) where the route produces the maximum operational profit.
In short, you need small airports (large airports have MASSIVE landing fees when compared to individual flight profits), sweet-spot ranges, and patience.
Welcome to AE!
A very good answer; courteous & respectful. Well said.
As the above suggested, best to stick to the way they would be used in the real world. You wont see a real world airline flying an ATR-42 back & forth between LAX & San Francisco all day because the landing fees are too high. You would make less trips with bigger planes. Same in this game with using up slots. However a twice-a-day service to some little regional airport 200 miles out of LAX would definitely be feasible.
It depends too on what your overall aim or strategy is for the game. If you're replicating a small regional airline, or just providing a benevolent, convenient service to a small number of imaginary pax with your imaginary local family-owned airline, then have fun! We've all been there & done that.
If you want to win a trophy on the other hand, you need to think bigger. Much bigger! And you wont even have time for small planes on small routes.
But it doesn't hurt to start small to get the hang of things. Learn what works, ask questions, & most importantly, just have fun.
Good luck!