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With the final drive having more teeth per inch, your engine has to spin faster to get your wheels to reach any given speed.
Your wheels are not spinning faster, your engine is. That is why it affects your gas mileage and not your speedometer.
When you change tire diameter, the speed your tires are rotating changes.
Larger diameter wheels spin slower and smaller diameter wheels spin faster, which is why they have an affect on your speedometer.
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Like I told my last wife, I says, "Honey, I never drive faster than I can see. Besides that, it's all in the reflexes."
-Jack Burton
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