I wouldn't say that's their 'normal' usage, I mean sure you can use them like that but fundamentally ordinal numbers are equivalence classes of ordered sets in the same way that cardinal numbers are equivalence classes of sets.

As you've rightly noted the latter equivalence class gets us nothing so throwing away the ordering is a bit of a waste. Of all mathematical concepts 'size' is easily the most subjective so picking one that is interesting is better than trying to be 'correct'.

In particular a*b* is exactly equivalent to ω^2, since a^n b^m < a^x b^y iff n < x or n=x and m<y. This gives an order preserving isomorphism between words of the form a^n b^m and tuples (n,m) with lexicographic ordering.