I don't necessarily understand everything your saying, but I'll give it a try.
When your using the Wizard's Visual Editor, everything you type in looks nicely layed out. But, if you switch to the Code Editor, you find out that everything is all smashed together. Not a single return character. All visual data structuring is gone. But if your only editing in the Visual Editor, it really doesn't matter. Similarly, if you copy/paste using the Code Editor mode, and then switch to the Visual Editor, all the line formatting will be removed.
By itself, HTML doesn't need any return characters. A browser doesn't use or need the structural formatting that you need to visualize your data. It uses the HTML formatting in the tags, and discards extra spaces and return characters. On the pro side, you could possibly argue that, eliminating all the extra spaces and return characters before the file is sent, reduces the time to send, time to display, and bandwidth. But it would be a weak argument. The savings are so small, it's lost in the noise.
The only thing that might benefit for this is the Wizard's data bases. Everything you put in your content areas is saved in a data base on the web server. By reducing the number of return characters, spaces, and poorly structured code, they can eke out a few more KBytes per content area. Even there, the argument is kind of weak, because the HTML tags can often take up much more space than the displayed text.
But there may be a little bit more to this. It looks like you are doing a copy/paste into the Wizard's content editors from a MicroSoft product. My guess is MS Word, which is the most common. When you do this, it drags in heaps of useless formatting. The formatting may apply in Word, but it's mostly useless on a web page and usually causes more trouble than you need. There have been several other forum discussions on using Word to copy/paste data into the Wizard. Before you use anything from Word, paste it into a Notepad window, to remove all of the useless formatting. Then copy/paste from Notepad. It's an extra step, and a little annoying, but it will reduce your content area's character count by 80 percent. Now that's a savings. It will also make your code easier to view, even though it will still be squished together.
If you want your code to stay visually structured, so you can view it easily, use something other than the Wizard. The bottom like is, that is the way the Wizard operates. There isn't much you can do about it, and there is not backing up to yesterday, once you saved and used the "publish" option.
