To investigate the impact of micro-crushing technology on rice flour characteristics and its enhancement of rice cake quality, resting angle, slip angle, solubility, water-holding capacity, emulsification, oil absorption, gelatinization, and baking quality, rice flour and rice cakes were analyzed using a texture analyzer and a gelatinization instrument. The results indicated that a decrease in particle size led to a significant increase in damaged starch from 18% to 26.5%. Both the resting angle and slip angle increased, indicating reduced fluidity. The gelatinization temperature decreased from 76.63 °C to 71.61 °C, the gelatinization time was reduced from 6.6 min to 6.4 min, and gelatinization viscosity initially increased and then decreased. Water-holding capacity increased 1.0-fold with decreased particle size, and solubility increased 11.6-fold together with the increase temperature. Emulsification and oil absorption were optimal when the particle size exceeded 120–140 mesh. The conductivity of the rice flour suspension rose with decreased particle size, while the conductivity of rice flour paste and cake batter decreased. Decreased particle size led to significantly reduced rice cake hardness and chewiness of 47.77% and 52.44%, while elasticity, restoration, specific volume, and porosity increased 18.75%, 15.15%, 31.16% and 25.10%, respectively. The skin and core color darkened with reduced luminosity, correlating with enhanced sensory scores. Correlation analysis revealed that physiochemical properties of rice flour influenced gelatinization properties, thereby affecting rice cake quality. This study provides a foundation for utilizing fine rice flour in rice cakes.