Yes decorations count. In one sense (probably the least important to me if they are the typical decorations) for the water they displace.
More importantly, to me, is for the environment they provide to the fish. They make up an important element of the habitat. Many times they are intrinsic to the health and vitality of your fish. Decor should be planned to replicate the natural habitat and behavior of the fish.
The gallons per fish is not dependent upon the number of inches of fish. Gallons are more important when considering the body mass, space required (territorial imperative), and the waste produced by the fish.