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Unfortunately, .pdfs were designed before the idea of re-flowable electronic documents was prevalent, so yes, each page starts over, and the text on it constitutes a new paragraph as detected by most textual-oriented software. Marcel Weiher's TextLightning.app for Mac OS X does attempt to recognize paragraphs based on text formatting, but it's better to go back to the original source document.
PDFs use compression, RTFs don't, hence the file-size change.
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