SSD have a built in failure, There is a limited number of writes that a NAND cell can sustain. HDDs do not have this inherant failure as the magnetic domain can have its polarity reverse as long as it remains intact.
An SSD uses an electrical grid axis (X,Y,Z being the charge) this axis is not mecahanically controlled. HDDs also X,Y axis (Z being the magnectic polarity), But must be access by mechanical means. mechanically. For HDDs the ability to maintain the sector alignment increase is more difficault as the domains become smaller.
But to the question which was do Larger HDDs have a higher failure rate. I've not seen a report that shows this, But if you look at new egg, you could get the impression that as the size goes up from 1 TB the problems seems to also increasa, Much more so for the Consummer class HDDs than the enterprise class drives (But then they cost alot more.
There is another problem in that there is a specified bit error rate (or some such verbage). With the old smaller HDDs it was just a number eggheads tossed around and totally exceeded the size of HDDs. There were some articals a couple of years ago on this as HDD size was expected to exceed this magical number - and that was before the 1 TB drives - Have not seen anything more on this.
Added - there is NO wear leveling algortium used on a HDD as there is no cell (domain) degregation based on the Number of writes.
What HDDs do imploy is added bits in a sector that contains alignment info. If the head can not read the alignment data the sector is "lost" and in many cases is why the data can not be read from a given sector, It's not the domain is BAD, it just "lost" the location.