I can't fix the padding/spacing on a form with CSS

In style.css this rule

.widget li {
border-top: 1px solid #F6F6F6;
margin: 0;
padding: 7px 0;
}

Adds 7px padding top and bottom of the li.

And base.css has this:

input[type="text"], input[type="password"], input[type="email"], textarea, select {
background: none repeat scroll 0 0 #FFFFFF;
border: 1px solid #CCCCCC;
border-radius: 2px 2px 2px 2px;
color: #777777;
display: block;
font: 13px "HelveticaNeue","Helvetica Neue",Helvetica,Arial,sans-serif;
margin: 0 0 20px;
max-width: 100%;
outline: medium none;
padding: 6px 4px;
width: 210px;
}

Which is adding 20px margin to the bottom of the input

Adding this to style.css will help:

div.ginput_container .large {
margin-bottom: 0;
}

And this will help a bit more:

li.gfield.gformlee {
padding-bottom: 0;
}

I'm no expert and there are probably several ways to do what you want. I think this might show you which elements attract the CSS rules that are applied. The thing is using sufficient specificity to apply to only the elements you are interested in.

The other thing is where you put it. If you are using a child theme then it is in you child theme's style.css. If you put it elsewhere remember it will get overwritten if you update that component of your site.

Martin