The magnetic behavior of bcc iron nanoclusters, with diameters between 2 and 8 nm, is investigated by means of spin dynamics (SD) simulations coupled to molecular dynamics (MD-SD), using a distance-dependent exchange interaction. Finite-size effects in the total magnetization as well as the influence of the free surface and the surface/core proportion of the nanoclusters are analyzed in detail for a wide temperature range, going beyond the cluster and bulk Curie temperatures. Comparison is made with experimental data and with theoretical models based on the mean-field Ising model adapted to small clusters, and taking into account the influence of low coordinated spins at free surfaces. Our results for the temperature dependence of the average magnetization per atom M(T), including the thermalization of the transnational lattice degrees of freedom, are in very good agreement with available experimental measurements on small Fe nanoclusters. In contrast, significant discrepancies with experiment are observed if the translational degrees of freedom are artificially frozen. The finite-size effects on M(T) are found to be particularly important near the cluster Curie temperature. Simulated magnetization above the Curie temperature scales with cluster size as predicted by models assuming short-range magnetic ordering (SRMO). Analytical approximations to the magnetization as a function of temperature and size are proposed.