Daniel -
There is very little choice (of any profile) of tyres in 16" size.........this makes changing tyres for the only reason of lowering the rear of the bike a non-starter.
Puffs wrote:I think your best bet is shortening the stroke of the ones you have, as outlined earlier. I'm not sure it would seriously compromise the suspension, but it would rather tailor the suspension to your preferences (which I always do too). Furthermore, it would also be a good opportunity to change the oil in the shocks.
Firstly of course, you have to get them apart......and in view of the age of the bike you'll probably find worn-out components. As far as I know none of these are available as spare parts.
Shortening the working stroke of the shocks effectively also increases the spring preload - this could present a problem if you are quite a light weight.