yes.
WBFS or FAT32 or NTFS are all working fine, and the games are not bigger if you use a game manager to install/copy the games on your HDD.
The manager delete the garbage data, like on WBFS partition. if the real data is bigger than 4GB, then the game will be split in multiple files, and the loaders can read them like if they weren't split so don't worry.
WBFS partition does not fragment (very very little, it's not needed to defragment a WBFS partition).
Wiimm tested it, you should be able to read the result in his topic about wtt/wit.