The game uses a new unique proprietary technology called texture virtualization or "megatextures" - the reason for this nickname is because a texture can be SO large it's a "texture island" it's not a small image that you have in DDS format and stamp the same square on whenever you want dirt for example. This is all handmade - it's a continious texture. Everything in the world is unique - there is no repeating texture pattern when you look at the game.
And i think 20 hours of gameplay isn't "just" as far as im concerned , this is not a RPG when everything is repeating for 70 hrs, and the wastelands are obviously VAST amounts of terrain that this game covers.
25 GB is not even large - This game is internally at about ~125 GB large and the studio needed a number of different compression solutions to make it into 22 GB on X360 - it was no easy feat.
3 Discs is rather small - the texture quality isn't anything special at this level - the game was originally planned to be 50 GB on PS3's Bluray.
I don't think i understand the "extra space" thing - extra from what ? What are you comparing too ?