So, most guidebooks recommend wearing "modest" clothing except in resort/beach towns in Malaysia and Indonesia. I'm a big dude, about 40 lbs overweight. I like shorts. But I'm trying to pack, and if I must wear pants in hot and humid weather, I guess I will. So in cities like Kuala Lumpur, Jakarta, and other smaller cities in both countries, how inadvisable is it to wear shorts?

I agree with #1, wearing longer shorts that cover your knees are best. I actually don't find that wearing LESS clothes makes you feel cooler anyway. What's more important is what the clothes are made from. Make sure you buy nice light cotton clothes as they breathe the best.
Even though you won't see many local men wearing them, short shorts are more of an issue for women than men anyway so if you really feel you can't go without your shorter shorts I wouldn't stress too much, unless you're visiting mosques or other buildings where "respectful" clothing is recommended.

We travel to Malaysia once or twice a year and my husband always wears shorts (except for visits to government offices and other formal occasions). No-one gives him a second look, even in Islamic areas such as Kelantan. When we go out with Malaysian friends in KL, they will sometimes wear shorts as well (even women - though not if they are Malay).
My husband wears longish shorts - but still well above the knee. (I would not allow him to wear below-the-knee shorts as I think most men look absolutely tragic in them).
Haven't been to Jakarta for a very long time so can't comment on shorts-wearing there, except that the Javanese tend to dress more formally. In Bali shorts are common, so no problem there.

Malaysians in KL, Langkawi and other tourist destinations are well used to seeing tourists walk around in all manner of shorts. The way some Chinese Malaysian girls dress in tiny tiny shorts makes all your attempts to cover your knees seem futile. In villages and away from the main tourist destinations on the east coast of the peninsula you may stick out more and will feel more comfy adhering to long trouser dress code.

Thanks. Yeah, I only wear shorts that are about knee length, have pockets and belt loops. Not beachwear and never a banana-hammock.
What about Indonesia? The same?

Indonesia the same. When they say conservative, it means no short shorts or walking around with no shirt on. And tank tops in beach areas only.

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<hr>My husband wears longish shorts - but still well above the knee. (I would not allow him to wear below-the-knee shorts as I think most men look absolutely tragic in them). <hr></blockquote>
Tee hee ... I like that one, Bude ! Same here. :))

I have lived in Kuala Lumpur for years, and wear shorts above the knee every single day. I'm wearing them right now. Many of my Malaysian friends wear them regularly as well. It's really no problem for a guy (nor for a girl, except in the some backward parts of Malaysia).
When traveling in the region - including Indonesia - I also wear shorts except for airports, meetings, and mosquito-filled areas.