Yeah, what the numerically lower ratio does is transfer less torque through the geartrain by making it spin faster. A numerically higher final drive is then required to multiply the torque back up again. That's why Honda's HRC kit for the XR600 included an NX650/XR650L primary drive set with a lower ratio.
1995 XR628R -Lots of goodies...room for more.
"Another breakdown, suicidal shakedown,
Feels like I'm livin' on a chain gang."