I think you're making some valid points there. Thanks for starting this thread. Having constructive conversations about not feeling good about yourself is not easy, especially not on anonymous message boards.
The title of the thread is about self-esteem, not about working-out or looks. I think it's a mental pitfall to assume that having a bigger dick or looking more muscular will also improve your self-esteem. There are plenty of good-looking people struggling with self-esteem issues and enough ugly slobs feeling great about themselves.
There are plenty of studies showing the correlation between working out and higher self esteem. AFAIK that is because you physically feel better, not because you look better.
I had a period where I didn't feel great about the size of my dick. I saw the documentary "my penis and I" (www[dot]youtube[dot]com/watch?v=Oo83VUVCJV4) It changed my attitude about my dick a lot, I haven't been insecure about my dick after seeing it. There's plenty of dicks in there and I think the main character is pretty cute, so enough reasons to have a look at it!