I don't doubt that on limited occasions issuing cards can potentially make a situation worse, but that's no excuse for not issuing cards when a foul deserving of a card is committed. I could be wrong, but I doubt any governing body has every published guidance to that effect, its certainly not in the LOTG.
It is a fairly common practice to not give a card on the first card-able foul and instead try to make it clear that there will be no more fouls of this nature. Unless of course the foul is a "serious yellow" or "orange card" or is a cynical foul to stop a promising attack. Red is another matter.
As for the contact, chest bumping and other such shenanigans -yes, pushing - not really. But I understand your point. Some referees can intimidate with size, Mark can't. I know a referee in SD that once players start running towards him, he whips out the yellow card and says "okay, who wants one of these". It works for him, because he has the whole cocky arrogant persona about him, but it wouldn't work for Mark.
Mark doesn't have the physical profile that Mystery Train is referring to, maybe he could have, but at this stage in his life, not really realistic. Mark was a Math teacher, and his refereeing style can be referred to as "The Explainer". I look up to him because that is also my style. Sometimes, I/he can over-explain so it looks like we are losing control of the match, and I sometimes end up getting my own words used against me. I'm sure Mark has learned with years of experience how to avoid that.
The important part of this style was that he first, blew his whistle hard and motioned to give him some space, then he started talking 1 or 2 players, so naturally, in that loud stadium, the other players crowd around to listen. His face remained calm as he firmly stood by and explained his decisions. Of course players will ask "what about that other foul/incident" and he will address every issue as it comes up. Mark stood his ground, never once looked intimidated despite his size, and listened to every argument that was thrown at him. His body language was that the body contact had no effect on him and that he would be unmoved as he physically did not move. Making eye contact can sometimes be a sign of aggression, remember the one game with the (Uruguayan I think) referee who slowly pushed the player away but looked down as he did it. But Marks eye contact had no aggressive connotations.
The advantage of "The Explainer" is that the players feel that they were listened to and heard and they vent and let their frustrations out. They feel the referee is someone they can reason with and work with and possibly understand. The disadvantage is that people think they can manipulate "The Explainer", catch him in a double standard, or that he looks like he is losing control of the match because people aren't taking his word as law the moment he blows his whistle.
The other style, lets call him "The Macho Man" although I prefer "Napoleon". The advantage is that players don't want to mess with him, his calls are quickly accepted (although grudgingly) through fear or intimidation. The game has the potential to go smoothly with justice enacted swiftly and decisively. The referee appears in control because his decisions are his decisions and no one can change his mind. The disadvantage is that the referee appears inflexible and not empathetic. This causes the players frustrations to be pent up, or bottled as they feel like their side is not being heard. The perceived injustices may or may not stack up and the players may or may not lash out or attempt to enact justice themselves (girls especially).
I have seen both styles go horribly wrong, and there are still other styles, each one is unique and personal to each referee as he perfects his craft in his style. I have seen that Macho Man SD lay down the law and control those southern HS boys Varsity games where all they seem to want to do is fight each other every game and I have seen him get things thrown at him with players crying in frustration after the game.
Common perception seems to favor the "Macho Man" style. The local SD refs that are older seem to be partial to the Macho Man style when assigning the top level games, although IMHO, the top referee assignors that assign the pro leagues seem to prefer "The Explainer" style.