If you've been exercising likely your posture is better so you are taller, you aren't slumping and feeling bad about yourself? Even after losing 12 or so pounds in a few months I feel taller - I'm already tall. But I used to have to work at my posture. I've been weight training and I think there are a lot of upper and back muscles that make one feel and walk taller... cool isn't it?
My mom said think of the pressure on your body of carrying so many pound dumbells around - for me it was an extra 25 lbs, imagine even a 10 lb dumbell in each hand with extra weight let alone 30-35 like you are talking about! Congrats, keep your head up and WALK TALL...
also, if you lose some weight, like - example, thigh weight. when your thighs are large and touch it creates a more horizontal visual effect. when you lose that weight and your thighs are slimmer, it gives your body more of a vertical visual effect...