Assessors are cool, and they only get about 2". Flasher wrasses get about 3". Slender anthias (Luzonichthys spp.) get about 2".
All of these will form shoals (not true schools) in an aquarium. The anthias are super delicate though from what I hear.
There are other fish that you can make groups of with a large enough tank if you start with lots of small juveniles. Royal grammas, yellow tailed blue damsels, orchid dottybacks, etc. etc.
How big of a tank are you thinking?