Yes, working at a larger size is to get round the foibles of Sketchup. Not only the minimum size for a circle, but also the possibilty of your model developing holes in it when you save it (I think saving triggers the minumum line length/point spacing check and Sketchup just throws out anything that falls below the limits, leaving holes where they should not be).
I either just work at a larger scale or use a component to acheive the same thing. I did describe this method fully in an earlier thread, but basically start your model actual size, but before you have done much more than create a recatangle convert it to a component. Then make a copy the component. Then scale up the second component to 10x, 100x or even 1000x. Now do all your editing on the large component when you should not get a problem with size limits during design or during saving. Due to the way Skethup works the original size component will also be correct despite its size. When you are happy with your model then save into another file, delete the larger component, and you will be left with the correct size one ready for export for printing.
This does sound like a complex way round, but is actually quick and easy to do when you familiarise yourself with the process.