Not everyone uses numbers to identify states. Many people prefer to use names, and would consider me a barbarian for using numbers. I prefer numbers because it is less taxing of my imagination to keep on coming up with unique and descriptive names. Besides, in some of the languages a state machine might get encoded in it is easier to code if the states have numbers.

Likewise, not everyone uses circles to symbolize states. A common variant is a rectangle with rounded corners. That certainly gives you more space for words inside. I use circles because that's how I first learned to do it, and for no other rational reason.

Whatever your preferences are, it shouldn't really matter. What matters is that you know what you mean and are able to convey that meaning to your colleagues.