When I fix books like this, I use Sigil. That allows me to see the epub and do search and replace across all files in it. For a book like this that probably an OCRed scan, that means I can fix the repeated mistakes easily. It also has a spelling checker, and you can add words or names to the list to ignore.
I use Tweak books in calibre for simple things. Mainly to edit the stylesheet or a single spelling mistake. Don't forget to press the "Rebuild" button. I've hit the cancel button or escape key a few times without thinking and wondered where the changes went.
Having the <p> tags start in a new line won't add spaces. From what I can see, the extra spaces are between the <p> and </p>. There are a lot wrapping the quotes and other punctuation. I know the first change I would be would be a global change of
to
And similar for quotes at the end of the paragraph. Fixing the broken paragraphs is a bit harder. Generally I only pick them up as I read. But, Sigil does have a saved search that can help. From memory, it looks for any end paragraph tags that have letter immediately before it.
The "<div class="newpage" id="page-405"/>" have probably been put there by the person who created the file to map back to the original book. The desktop ADE didn't seem to use them. As there isn't a definition of the "newpage" class, I don't think it will do anything. I have seen a similar thing in other books but they used an anchor tag.
Just remembered: I looked in the MR library for a copy of this. There is only a German version. Unless you are trying to match a paper copy you have, it might be useful to look at it to get ideas of the styles used and in to compare the punctuation.