Learn Polish: Usta są małe. - The lips are small.

Usta means lips or mouth, and in Polish it is always a plural word. Because it is plural, we have to use są (are) instead of the singular jest (is).

Does usta mean mouth or lips?

It translates to both! Polish uses the plural word usta to talk about the mouth as a physical feature, as well as the lips. Even if you are talking about one person's mouth, you still use the plural word usta.

Why is the word for small spelled małe here?

Because usta is plural, the adjective describing it must also be in its plural form. For plural words that do not refer to groups of men, adjectives take the -e ending, so the basic dictionary form mały changes to małe.