How can I play a short/small, but still satisfying round of Diplomacy?
You probably need an odd number of players, say five, to make the game flow with a majority vs. a minority dynamic.

Second, you need to choose two countries to eliminate. Italy is the obvious first choice, least fun to play. Germany is the recommended second choice by the game designers. But that has the disadvantage of separating the board into England-France, and Russia-Turkey-Austria. In a game I once played, we eliminated Turkey, instead, as not really being part of Europe. It had the advantages of keeping the countries connected, and of making Austria fun to play with two fewer enemies. The game itself goes faster with two fewer people.

You put single armies in each city of these eliminated countries, and let human players defend these "city states" by supporting them.

The other rule is that a "minority-majority" wins. That is two people (a minority of five) can declare themselves co-winners if they control 18 (a majority) of the 34 supply centers. Not needing a single winner shortens the game. Alternatively, anyone that survives the whole three hours is a "winner."

In this game, Austria and Russia won. They carved up Turkey and the Balkans, then headed west, while England, France and Germany fought among themselves. Not hard for them to get 18. And the game lasted just over three hours.