Reduce what file size? You can't reduce autocad's files without destroying it altogether. Do you mean to reduce file sizes of dwgs? Be more specific.
purge your drawings, and set ISAVEPERCENT to "0", and that should do the trick!
also, deleting all of your *.bak files will save disk space, assuming you back-up your server on a regular basis
You could try writing your entire drawing off as a block, open the new block using RECOVER, then purge it and save over top of your old drawing...
"except that anything on paperspace will be gone."
Not true when you write off the entire drawing as a block. What you do end up having to reinstate are your plot parameters, using the Page Setup Manager.
type that in command line, in the dialouge box, click "Purge All". You may have to click this a few times, keep doing it until it is unhighlighted and you cannot click it anymore.
There is also a "purge" for files that have been created in another program, such as Revit, that allows you to purge the "garbage" that comes along with them.. I forget the command, but the sub command I remember is "R"
You may be thinking of Regapps...