What a lovely boy! I like the look of the sheepskin lined girth.
If you can't return the bridle for a cob size, why not punch some holes in it at the point where it would fit him better? If you have a local leather or shoe repair shop the could do this. And then possibly shorten any long straps if needed so that they don't flap around.
To fit a girth, you should have several holes (at least 4 or so) left near the top of your billets after you fasten the girth tight enough for riding. What you want to avoid is the bulk of the girth buckle right under your leg where you grip.
He would be stunning in the colors that look good on palominos. Natural light colored leather, light blues, light greens, soft tans, golds, turquoise, soft shades of colors like pastels. I could so see Newmarket style leather on your boy :) or the light leather colors that are popular in western.
He has a cob style/delicate structure, so keeping his tack slim in style, not bulky will be a good look for him. The bridle you chose its an excellent profile for him. Definitely not a wide clunky style, this bridle design you have suits his face well. He would look lovely in one of those fitted style English pads or the smaller all purpose/English saddle pads. Stay away from the large boxish dressage style pads.
Yeah, everything I got for him I got second hand or cheap-- the saddle is used ($150), the pad I got from horse.com ($20) and the bridle was from the local tack store ($47). I've never ridden English, so I didn't want to invest a bunch of money in something I'm just going to do in my free time (what little I have, anyway).
Here he is without the tack today-- you can really see how much weight he's gained based on the first pictures I ever posted of him (you can see them in his profile). This is weight gained just on grass; he's not getting any extra feed at mom's house, as they only do extra grain for emergencies and in the winter time (and even then it's only for the senior horses).
His feet are still a hot mess, but I can't get a decent farrier out here that will make a trip last minute while I'm here.
Yup, the bridle is too big. You can't make it any smaller as the buckles are on the top hgoles. Punching more holes will put the buckles above the browband....bad! Instead of selling it, I would take it to a shoe shop and have the buckles moved. I would move all three (both sides and the noseband). It would probably be a lot easier and cheaper than going through the hassle of returning/selling it.