General thoughts here.
On offense, the general goal of the 11 guys out there is to create space within the confines of the field to move the ball.
On defense, the general goal of the 11 guys out there is to leverage the confines of the field and take away and/or clog up space so the offense does not have room to move the ball.
One of the ways to create space on offense, is with the spacing on the offensive line at scrimmage. There are many, many other aspects to creating space on the field on offense. Pass route running, specific offensive formations, etc. etc.
Everything you do on the field has it's advantages and disadvantages. Being compact on offense makes it a very simple game on offense. Line up and beat down your guy, and the running back needs to either run somebody over or make somebody miss, and you're off to the races. It also makes for a very nice play action passing game with out having to send routes out all over. It can be really hard to defend, if you've got a real powerful running game, and can throw over the top of it, but if you don't, and/or you're oging against a really good defense, the defense doesnt' have a lot of work to do to close down the field.
Being wide open, and using the field sideline to sideline and endzone to endzone on offense, makes it very hard for a defense to close up the field on an offense regularly. Very hard. But you need to be able to make plays on offense in 1-1 situations and you need to put the ball in the open spaces either by running or throwing and catching. Holgorsen's offense that we saw recently is all about that. They get a RB in there that can regularly make the first guy miss, and look out. They go sideline to sideline and end zone to endzone, and we got beat 1-1 a bunch of times.
We were compact in the past on offense. We used very little space on the field and didn't do a lot to create space. We're changing that, but we're going through growing pains.