In Android Studio, I'm building app with minimum Android 5.0 lollipop. I read that Nexus 4 is the minimum device available with Android 5.0 lollipop.
So does this mean I should ignore working on the screen sizes of Nexus ONE and Nexus S (since they are earlier versions)?
If you set minimum 5.0 you don't need to be concern about screen size, you need to be concern on android version. Your mentioned devices (Nexus ONE, Nexus S) are below 5.0, so you have to ignore these devices.But you need to be informed that small screen size's device can be above 5.0 (android 5.0). In that case you have to be concern about small screen also.