I'm dancing and competing with someone who is 10 inches taller than me. It works just fine, no pain for either of us, very light body contact (just a brushing of the shirts, really). However, it takes a lot of work for him to be lower in his legs, and it takes a lot of work for me to always be maximizing stretch and line.
Now, this isn't world or national championship-level dancing, but it is good and enjoyable advanced-level dancing that is fun and satisfying for both of us and actually doesn't look that horribly mismatched on the competition floor.