I’ve solved the first problem and will share it here because it might help others who face similar issues.
In one of the tracks, there was just one clip. I then created a title image in Photoshop and added it to the track. That was when adding that small image file made a 1.3 GB increase in DVD requirement!
After a good night’s sleep, I investigated and noted that the clip had a resolution of 352 x 288. The added title image, however, was 720 x 576. [I was making quite a few of them for the project… and the other clips in other tracks were all 720 x 576.] I had presumed!… always a big mistake!
It would appear that adding the 720 title caused the 352 clip to upscale (i.e. presumably to match)… hence the huge, overall jump in TAW5 file size.
I redid the title image for this track at 352 x 288. Replaced the 720 one with the 352 one. No jump, this time… it just added a few KB, as you’d expect.
The answer (and this may apply to other DVD creation software) is that a track will upscale to whatever is the highest resolution clip/image.
HOWEVER, I still cannot fathom out why adding files (.m2v) makes the overall TAW5 file much smaller. I’ve managed to prepare a 7 hour DVD of 720 x 576 res which takes up 5% of a single-sided DVD! Bonkers!