195/55R14 tire has the same diameter as the 165/65R14 OEM Insight tire.
55 is the aspect ratio in ralation to the tire width, so it's only a lower profile if the tire width is the same.
195x0.55 = 107 mm sidewall height
165x0.65 = 107 mm sidewall height
You can only replace the OEM tire with a tire that has the same or higher load rating. The load rating of the 165/65r14 OEM Insight tire is 78.
The 165/55R14 tire you suggested has smaller diameter while maintaining the same width. This means it has a much lower load rating that is not sufficient for the weight of the Insight.
My race tires have a smaller diameter and it has a higher weight rating because it has a larger air volume.
185/60R13 has a larger air volume because it uses a smaller rim and the weight rating is 80.
I don't recommend getting a tire size to reduce the tall gears for street use. It increases the chances of getting tire damage in pot holes etc...
And the difference in gearing is not noticeable.
For racing it allows me to have a lighter weight rim and tire combo and improve torque. But tire width is more important for handling so my race tire this year will be a 195/55R14 Kumho 710
To compare the diameter of different tire sizes use this link:
http://www.miata.net/garage/tirecalc.html