CMFB - wide devices reduces voltage drop?
I mean the output resistance is dependent on the length so why would voltage drop change?

It is not about the output resistance, it is about the DC voltage drop you get across the M7 and M8.

NMOS M7 and M8 together have to conduct a certain current. Suppose that this current causes their \$V_{DS}\$ to be 100 mV.

Now what happens if we made M7 and M8 twice as wide, while keeping everything else the same. Would that \$V_{DS}\$ then decrease, stay the same or increase?

Note that output resistance is a small signal parameter. My story above is about the DC (biasing) situation, there is no signal present. I am not considering small signal behavior at all.

The same is true for the remark in the article, it is not about small signal behavior, only about DC.