What kind of microphones does aviation use? Do they use the dynamic ones or cheap ribbon ones? Also why are these microphones so small?

I guess they dont use condensers. (I am yet to see an 3.5mm jack (which is used both on the C172 and the B747) that can supply 48V phantom power to the one of those)
Microphones used in aviation are usually electret condenser microphones that do not require any phantom power (obviously there are different types as well).

While General Aviation Aircraft and many airliners use the dual PJ connectors (PJ-055 for headphones + PJ-068 for microphone), the Airbus and ATR aircraft (and probably some others) use XLR connectors. Most helicopters use the combined U-174 connector for both headphones and microphone.