Yes, packing lines DOES reduce wait times. I worked GMR, and I know it works.
How?
By packing the line, you can cut the length of the line almost in 1/2. Most people kinda straggle in and form a sort of straight line in lots of rides where there is simply no straight line but rather a "funnel" or "chute". Think about pirates/mansion/GMR/or many other rides. They start out with a wide line or "funnel" and gradually get smaller and smaller on purpose allowing for the guest to eventually become a single person line.
There are many turns and twists where there are large areas of the line that don't get "filled in" by people - where it should be filled in and designed to be filled in - making the line look longer than it is. Packing the line makes the line look like it's shorter, and become shorter as well.
Each ride has a capacity for the # of people and # of ride vehicles. By not moving quickly (and not packing the line), guests can actually slow the ride down.
CMs are always doing math in their heads and doing it as quick as possible - which is quite hard to do when you are trying really hard to load a large ride vehicle like GMR and trying to get it out on time. So if we are a little curt, don't take it too personally. 30 seconds or so goes by pretty quickly when you are trying to load a large ride like GMR or even get as many people as possible to move in the same direction into the stretching room at HM. Sometimes it's like herding cats!
The other thing that slows down rides and can contribute to sardining is a guest not knowing how many people are in their party. So, you say that you have 2 in your party, forgetting that you have 3 and now you are all stuck together. Remember how many people you came into the ride with and tell that to the CM. Remember, they are trying to get the ride vehicle to go out with the correct amount of people that the ride is built for.
Most cms do not overpack rides. But we are also trying to estimate the size of the party and person for that ride. Which can make them kinda evil sometimes. Example: Each row at the GMR ride is built for 6 people. But, for the Pooh-sized, we would only put 4 Pooh and 2 piglets = 6 people. See, evil, but size conscious. But you have to get the people in and out. That's the whole bit about the rides.
So, I guess the lesson today is please fill in all available space (really, there is more space than you think), keep your parties together (know how many you came in with - that helps a lot, and have a leader who can tell the cm quickly how many there are), and keep those hands and feet inside all vehicles, move with purpose, and the lines will actually get shorter! Trust me!