car size for 3-4 adults & luggage

Last time in Italy we had same scenario -- 4 tall adults, minimal luggage. An Alpha Romeo Giulietta hatchback worked well for us. (We rented from Gemut.com and picked up our car in Florence at Europcar.)

Most car rental web sites attempt to describe the space options for both the people and the luggage at each price point. But they won't guarantee a specific model of car for your reservation.

3 or 4 adults is a big difference.
Typically an economy size in Italy is the size of a Toyota Yaris hatchback. So 3 adults can survive only by folding half of the seat and increase the cargo space.
A compact car, such as a Fiat Grande Punto, Citroen C3, etc. is about the size of a VW Golf or a Ford Fiesta. The trunk space should be generally big enough for 3 carryons and probably some smaller items. So you should probably fit 3 people with no need to put anything on the back seat, and everything might fit in the trunk. You might even be able to get 4 adults if they all have carry ons.
With a midsize you can definitely fit 4 adults plus the luggage you describe.

Use a consolidator (www.autoeurope.com or www.kemwel.com or also www.gemut.com). They work with the major rental companies and usually have better prices than directly. In my experience Europcar and Hertz are cheaper usually.

Below is the Europcar fleet in Italy, so you get an idea:
https://www.europcar.it/la-nostra-flotta

Note that rental car sizes in Europe are often defined using the ACRISS 4 letter code (for example CWMD=Compact Wagon Manual Diesel) instead of the more generic midsize, economy, etc. So this is a legend of what each letter means:
http://en.wikipedia.org/wiki/ACRISS_Car_Classification_Code

We have rented Fiat Punto for 3 with luggage, there is a larger Fiat 500+ hatchback (can't remember the model name, I think it's 500L) that is quite spacious for 3 or 4 with just enough space for carryons and personal items.