It says in the pokèdex entry that wailord is the biggest Pokemon. Is it in actual fact Ditto is because it can transform into anything?
No, Wailord is the biggest. Transforming doesn't make it the biggest, as it can transform into other Pokemon, such as Joltik and Magikarp, which are smaller, evidently.
Wailord is the biggest Pokemon. Ditto can transform and can be the biggest Pokemon in Wailord, but in its normal form, its actually pretty small.
Hope I helped.