Yes, and yes to some extent.
It compresses image/audio/video. Depending on who does it and how much, mine are typically 80%, which is very lite. Most can't even tell the difference between compressed and uncompressed, and the ones that do download compressed versions because sometimes they think it's way too large for the amount of content (not this game).
There are other reasons as well (for me anyway
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), why download most games that are GBs in size when most of the time you will be deleting most within a few minutes of playing them, and a high number of times you won't even notice it is comrpessed. (again not this game).