Looking for a clear explanation...

[low_bidder]

Warhead is also the size, which is used (or used to be) to determine if the target is in cover or not when calculating casualties. Cover reduces the casualties. IIRC, size 5 or bigger warheads turn Good cover (rough or entrenchments) into clear/no cover. Casualties were calculated on the state ( Moving , moving fast, ready, pinned, retreating, etc.) If the target was soft and in woods, or a wooden building it gets some help but not as much as a stone building. Or not as much as entrenched or in rough, which are the same by game terms.
The actual numbers are on the in game help screen menu.
Warhead size is also used when reloading ammo. Look Waaaay back in the threads and see if you can find one of the reloading threads.
Also remember there are no absolutes in SP. The best chance of a hit is 99%, the worst is 1%. No 100 or 0 percent. IIRC, heat is worse as far as random results. That is realistic. In the laboratory, HEAT gives 3x it's diameter in penetration. That is when you place the charge flat against the plate and trigger it. Out on the battle field, that doesn't happen very often. I dimly remember reading that when the US Army was designing the 66mm LAWs they looked at the 66mm Bazooka to see why it didn't work as well as it should have. It seems the bazooka round was unstable and would rotate around it's axis in flight. It would also wobble. That reduced it's theoretical penetration of almost 200mm to less then 30, on average. Which is why it wouldn't kill a Mk-IV from the front very often. A matter of luck and range. The wobble increased with distance. There was a 'sweet spot' in the range of the early bazookas. In that sweet spot, it was a good weapon. Outside of it, you were better off throwing rocks.