Does distance decrease with the increase of mass/gravity?
Relative to earth, yes, an increase in earth’s mass would bring everything including Mars some small but calculable distance closer. The converse is true as well. Technically, the 400lb woman you in the seat next to you on the plane has more gravity than the 20lb crying baby next to her, and thusly, you and everyone around you are more attracted (but certainly not in a romantic sense in either case) to her than the baby.
I think its easier to imagine gravity as ripples in a pool. The farther they move away from the object the less influence they have — gravity like anything else becomes diluted if you spread it out over a huge area, just like sound or light is dimmed at a distance. So even if Earth were quite a bit larger, the gravity would still be much too diluted in the vicinity of Mars to have any effect on that planet. The Sun, by comparison, is absolutely enormous so its gravity creates an enormous dent in space. Even at the distance of the outer planets the “ripple” is still strong enough to hold the bodies in orbit.