Actually, I’d disagree on the naoko getting bigger. However they do best in a 4’ tank. My naokoae is my smallest wrasse at possibly just over 2 inches. I assume he’s fully grown as he hasn’t really grown much bigger since hitting 2 inches in size.
His activity level is where I agree they do best in a 4’ tank (They can be in a 3’ but they really do best in a 4’). This species goes all out when he displays - Albeit the lubbockis don’t really let my current one display. My first one that I had when my 4’ was first set up was the only fairy in the tank so he would display on the daily. He would often go from one side of the tank to the other within a few seconds.
If you want to see the display you’ll really want to get this species in first as if you go for another species you think is docile then add a Naokoae then it’ll most likely end up not displaying. Some more docile species can actually over power a Naokoae.
But if you don’t mind not having the displaying then you’ll have one character in the tank. Mine plays around with me when my hand is in the tank, although sometimes it’s not great as I almost managed to squish him when I was putting my wave maker back on the side.