core size for low frequency transformer
I have read that for transformers operating at low frequencies, a
  larger core is needed.


Correct when comparing to a transformer operating at a higher frequency but with the same line voltage. This is because of core saturation problems. Generally, a 240 V AC 50 Hz transformer run at 5 Hz should not have more than 24 V AC applied to it (for example).


  I thought this formula for finding the induced voltage in the
  secondary coil would apply


The voltage induced on the secondary is related to the ratio of the turns between primary and secondary with a couple of provisos: -


Primary leakage components (such as copper loss) is not significant enough to "drop" much voltage. Any vot drop here results in a lowering of the voltage actually applied to the "useful" turns in the primary.
The coupling between primary and secondary is near 100%. Loss of coupling means loss of secondary voltage and increased leakage components on secondary and this has more of an effect under load conditions.



  Is this the correct formula to use?


No, you need to take account of the turns ratio and the other points mentioned above.


  If the above formula gives me a value for the induced voltage in the
  secondary coil that equals a lower Watts value in the secondary coil
  than in the primary coil, does this mean that the transformer core is
  too small for the frequency?


It can also mean that copper losses are significant. It can also mean that eddy current losses are significant. It can mean that coupling is not great and yes, it can also mean the core might be saturating.