All the content is smashed together cheek to jowel without a doubt. And, there is so much content that getting it all to work together was impossible.
THUS: Less content = less conflict between in game systems = more time to test remaining content = better running game
Less content = better game.
What the hell are you talking about. Less content = better game, on an RPG like skyrim, absolute rubbish. Maybe for an action game like call of duty, but for a game designed for you to go out and experience the world, do quests etc, more content always = better game.
The default timescale is 30 (I think). Anyway, I find that when just walking across the map, this increase in time makes the game feel bigger than it actually is. I always set my timescale to 1 so game time matches real time. It makes dungeon crawls a little more realistic, time wise, but in makes the open map out to be the small size it really is. I agree with the OP. The amount of content is fine, it's just the world map should've been made big enough so that after a couple minutes (real time) walking and looking around you might get an icon appear on your compass of some nearby landmark (ruin, cave, city, etc.).
I really wish people on consoles had the option to change this, I would really like to change mine to 1:10, possibly 1:15. Does it cause any quest problems?