I was pretty confused when I first saw the scene in the manga, though I laughed it off after three minutes of staring at it.

It's really just fanservice. Yukiko is pretty busty compared to the other female adult characters.
The proportion really doesn't work out, of course. But if you look at the older Conan episodes and chapters, Conan's body is drawn in a much smaller size in comparison to his head, sort of in "chibi" type style. Though that's the best I can offer as an explanation, and it's not much of a good one.
After all, Gosho slowly started pulling out of the "small, chibi Conan" look sometime around volume 9, so he still wouldn't really fit (and that look persists longer in the anime, and Conan's head is still huge compared to his body). The chibi look was an on and off thing until about volume 15, from what I can remember.
But it's no use trying to wrap the mind around it; it gives me a headache every time I try. Since this is a cartoon we're talking about, anything can happen that defies real life, especially when the creator's still working out on his style and anatomical proportions. I doubt Gosho was as pressed to make things look realistic as he is now.
