the height of city is reasonable. I too am on the stock tyres. the mud flaps are in such a position that they would touch the speed breakers with normal height but not normal width. (the wedge shaped kind of).
also with 175/65/R15 (stock size) and with 195/65/R14 the height of the car remains the same.
the reason i am suggesting 195 is because the suspension of city is very hard. it needs cushioning: both width wise and tyre height wise.
people use 195/65/R15 but that puts a lot of load on the engine, as well as steering system since change in the circumference of the wheel exceeds the normal limit. moreover the city is based on Honda Fit platform that does not have 15" wheel size. they are only offering it to compete with the rival of city: corolla.