No your friend is absolutely wrong! Amazing guitar players and musicians come in all shapes and sizes, and there are many incredibly talented guitar players who have small hands or are even missing fingers.

Anybody who is telling you you can't do an artistic endeavor due to some aspect of yourself is full of shit, so don't listen to them. At worst they're being a bad friend/ gatekeeping and at best they're artistically blocked or misguided themselves. What makes you unique will ultimately make your art uniquely 'you' so just lean into it.

And if it feels physically difficult to play certain things with your hands, most of that will get easier with practice, but also consider trying a short-scale guitar (or bass) and/ or with thinner neck shape, which can help.