The lever en masse started during the French Revolution with the main philosophical ideology starting with Rousseau, suggesting that a conscripted citizen army would prevail in the defense of their homeland. Taking this, Carnot, the man responsible for setting up and managing Revolutionary armies (also known as "the organizer of victory"), would have conscription quotas based on departments and population.

Now, how is this different than armies before the French Revolution? Well, it's one of almost night and day. A pre Revolutionary army was recruited by Head hunters that looked for people that wanted adventure, were drunk and unknownly accepted a comission, or the dregs of society and those that were criminals. So, the near exact opposite of a levée en masse. The reason armies were small was because the state was paying for everything and this was at a time when Royal expenses were a part of the state budget.

However, in the beginning of Revolution, the armies were small. It would take the slow enlarging force of Napoleonic strategy to increase the armies of Europe.

/u/DonaldFDraper basically sums up the impact of the Levee on the armies of the Revolutionary Wars. Prior to that, most armies were built on commissions or "commissions".

Essentially, recruitment worked one of two ways. The above board way was through the commissioning of regiments. Basically, an aristocrat of some financial standing would offer to equip a regiment for their monarch in return for a certain proscribed amount of money. Ostensibly this money would go to food, clothing, shelter, and supplies. In addition, the state would pay for signing bonuses which would entice men to volunteer for service. (As an aside, in French service, this practice was severely abused. Men would often recruit themselves to multiple regiments, commanders would provide substandard supplies, or would simply fabricate soldiers on their muster rolls. This only became an issue in the event of an inspection, when the commander would have to quick hire a few standees. Of course any surplus money in that process would go into the crafty commander's pocket.) Volunteers were attracted from a number of sources, including from criminals, the mentally ill, those with no better prospects, and those foolish enough to think military service adventurous and romantic. These men would enlist for long-term service, and could be deployed across the globe. All these prospects made military service unfavorable, and coupled with the low pay, it meant that only the most desperate would voluntarily enlist for service.

The other way regiments could enlist men was to Shanghai them. Essentially, roving bands of soldiers would wander city streets, bars, taverns, and other dens looking for the weak, vulnerable, and drunk. They would snatch their victims and spirit them away to regimental camps, or worse troop ships. By the time the unfortunate soul came too, they would have found themselves on a regimental muster roll, and impressed into military service. This could be especially inconvenient if said regiment immediately left the era, taking with them all of their ill gotten recruits. However, its important to note that the impressment of men as sailors was far more common than for soldiers, especially in England.

To your second question, armies were generally much smaller during the 18th century than in the 19th century, and it was due in part to the limits of recruitment. The largest forces usually committed to battle in the 18th century usually numbered between 50,000 and 100,000 men. To rattle off some figures: at the Battle of Blenheim (1704) the Allied forces had about 52,000 men, Oudenarde (1708) 105,000, Fontenoy (1745) 52,000, Rocoux (1746) 80,000, Torgau (1760-Prussians this time) 50,000. But this isnt to say that the militaries of the were that small. Countries increasingly began to operate multiple armies which acted in multiple theaters across an ever expanding continental and later global conflicts. Further, most countries operated a number of fortresses, magazines, and strong points spread across their territories, as well as garrisons both at home, in occupied lands, and in colonies across the world. In addition, the casualties a field army could face in battle could be a large percentage of its army. For example, of the 50,000 Prussians engaged at Torgau, over 16,000 became casualties, a rate of over 30%. So not only did nations have to generate these armies and garrisons, but they had to constantly rebuild them as a result of desertion, disease, and decimation in battle. That meant that finding new sources of manpower was an ever present challenge for states, who were in constant need of more soldiers.

In this context, the Levee en Masse is critical to solving those manpower shortages. Rather than rely on the vagaries of conscription, military institutions could rely on something more regimented, and something which operated on a larger scale. And in addition the vastly larger scale of the Levee, it also introduce a new attitude towards soldiering. Rather than something relegated to the dregs of society, the Levee introduce the concept to the masses. Motivated by national pride and ideological enthusiasm, armies across Europe increasingly incorporated soldiers who were less likely to desert and more cooperative than their older comrades. For better and for worse, people began to identify with their national militaries, as well as with their conflicts.

Sources:

Russell Weigley, The Age of Battles

William H. McNeill, The Pursuit of Power

David Chandler (ed.), The Oxford History of the British Army

Dennis Showalter, Frederick The Great

Geoffrey Best, War and Society in Revolutionary Europe 1770-1870