Massive increase in file size

Hi,
We have lots of experience creating images and software UIs but are new to video editing so apologies in advance if this turns out to be a noob question, We have seached this forum, other forums and google but have not found the answer yet so I hope you guys can help.
We have captured a screenshot video demoing some new software using MS Lync, the file is in mp4 format, the size is 16MB and the duration around 30 minutes. We then opened the file in Premier, cut out around 10 minutes of footage out, added 3 or 4 splash screens and a few fades between cuts.
The file was then saved using the lowest frame rate possible and 720dpi for YouTube quality. Somehow, despite the video duration being reduced by 30% the file size has increase by a factor of 8, from 16MB to 130MB!
How is this possible? Where have the additional 114MB come from? And most importantly how can we reduce the video back down to a reasonable size. Either we have misunderstood how to save videos to a reasonable size or YouTube have a server farm the size of a planet!

Understand that with most "video" such as a movie, commercial, documentary, etc. large parts of the image change with each and every frame, lots of motion, often EVERY single pixel changes from one frame to the next and that information all needs to be included in the compressed file. With computer screen grabs, things are usually very static, maybe only the mouse cursor moving around while the entire rest of the screen is the SAME frame after frame after frame. VERY easy to compress and that means small file sizes, also benefiting from low frame rate (10fps) and small frame size (800x600).
So, that is why the initial capture is so small, as the encoding settings are optimized for mostly static computer screens, totally different than "video". But then you encode using a 720p HD YouTube preset and that codec is designed for moving HD video compression and makes larger files then, even with same content as before. Hope this makes sense.
I have done computer training before with Camtasia and within that app, used Windows Media to encode the final clips and that did result in very efficient encoding, packing almost 4 hours or training into about 650mb, which would not happen with "video" content. Not recommending you use .wmv, just offering that comparison. So I don't know what encoding settings to recommend for your particular need - someone else can chime in - but just wanted to explain why you are seeing the different file sizes.
Also, not familiar with Lync and have no idea what compression format they are using to record with
Thanks
Jeff

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Massive increase in file size

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