As far as attractions goes...
I worked at Splash Mountain and in the Line Keep-Up Spiel we actually say "While waiting in line for Splash Mountain we ask that you please keep up with that person in front of you, filling in all available spaces. This will help keep our operations running as smoothly as possible, but more important, folks, this will help keep your wait time down to it's absolute minimum." And then it goes on about keeping FastPasses out (one of my BIGGEST pet peeves) and extinguishing all smoking materials.
We want to have the Guests close enough so there's no huge gaps - that way more people can fit in the queue. Also, if your back is turned to another party and you're not paying attention, that can mess up the CM at merge (where FP and stand by come together). Those seconds actually matter. Put it this way, at Splash we're supposed to have a dispatch interval of 11-18 seconds. Those few seconds do add up when some Guests aren't paying attention. The less space (but keep personal space, we don't want you on top of some random family from like Iowa or wherever it may be - uncomfortable for all!) between parties, the less time it takes to catch up, and believe it or not the fast you'll be on the ride.
Trust me. I've seen it happen. While working Grad Nites (to any CMs who worked those nights - you are all my heros! I can't believe we made it through that!!!) there was no FPs, only a stand-by line. In the beginning the grads were all keeping up, but towards the end there were huge gaps and that lead to sending logs that weren't full.
Also, another reason was stated right there - we have an hourly count that we try to make. For Splash it's around 1800 I believe. During Easter weeks we spieled to the Guests more than ever and we actually got 2,070 Guests on Splash Mountain in 1 hour.
There is a need for personal space, however CMs do try to get you as close together without invading that space.
Trust me, there's nothing that irritates me more than when people are bumping into me with HUGE backpacks, the big plastic strollers rented by MK (because SOME people just cannot seem to get ahold of how to drive them and run over my feet), or a tray in a food line.