Illustrator is fundamentally a page design program and will default to creating letter size pages with inches as units. Illustrator is versatile though, and you can choose to work at any size . Let's assume you are designing at 720x540 (which is equivalent to 720x486 in non-square pixels):
In Illustrator, go to File>New or press Cmd+N (Ctrl+N).
In the New Document Dialog Box, change the units to Pixels.
Change the Width to 720 and the Height to 540.
Choose RGB for the color profile. After Effects can import CMYK Illustrator files. It applies a CMYK to RGB conversion on import but this may result in a subtle shift in color. You should design in RGB to avoid color shift.
After Effects is versatile too and could work with a letter- sized file but things like anchor points will be all out of whack. Its just good practice to work with your composition and purpose in mind.