controlling paragraph spacing is done under 'Look & Feel'. You can either enable the 'remove spacing between paragraphs' option, or control it yourself with extra css. Extra css is more complicated but provides finer grained control.
Another user was just asking for something similar, it's discussed ad-nauseum in this thread:
https://www.mobileread.com/forums/sho...d.php?t=144597
Look for the extra css options in the second half of the discussion for examples.