I'm not a mechanic or even mechanically inclined, so please forgive the novice nature of this question.I've noticed that American cars engines are larger than their European counterparts, but have lower HP. Smaller European engines rev higher and American ones seem to have more torque...so my question is, is the American design method done for the sake of reliabiliy
I think you have roughly the right idea. I believe the American car you are thinking of is the Pontiac 6.0L monster with less than 200hp or any of the engines available in cars like the Taurus, Escape, Malibu, and whatever Dodge is making these days.
I think they are designed to be under-tuned for a more reliable, less stressed motor, and more torquey so the power is available and usable when driving around in traffic.
The European cars your thinking are the imported, sportier, higher end variants that we get here. Not the normal people carriers they use over there. So the motor you might be thinking of is the BMW 3.0L used for years in many different models that produced 225hp. A full litre smaller than the Jeep motor and 25 more hp.
Works on bikes too. Harley is 50% larger in cubic inches, but 50% LESS in HP than a BMW bike. But it is loaded with low end torque.