Why is the register length (in bits) that a CPU operates on not dynamically/manually/arbitrarily adjustable? Would it make the computer slower if it was adjustable this way?
Imagine you had an 8-bit integer. If you could adjust the CPU register length to 8 bits, the CPU would only have to go through the first 8 bits instead of extending the 8-bit integer to 64 bits and then going through all 64 bits.
Architectures like ARM (presumably others as well) supports half precision floats. The idea is to do what you were speculating and @Margaret explained. With half precision floats, you can pack two float values in a single register, thereby introducing less bandwidth at a cost of reduced accuracy.
Reference:
[1] ARM
[2] GCC