embracing the neck is not necessary...u can still bar without embracing the neck... it might seem tough at first but keep practising it..ur index (barring finger) will eventually gain strength...supporting the neck with the thumb is always good imo....as far as having small hands is concerned, i wudn be too worried abt it..again, takes getting used to..altho its a plus to have a thinner neck but its not necessary..i have small neck guitars as well but whenever i play fatter necks i can still readjust and play as normal as i wud on a smaller neck guitar..'fret' not my friend! ull get used to it!

baw haw haw note the little 'fret' joke i made bawhawhawhaw...

finger strength is key..that takes practice... :)

i have small hands too