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The tutorial demonstrates how to reduce the file size of an Excel file from 16.4 MB to less than 50 KB. The key points include ensuring the file is in tabular format with no blanks in top rows or on the right. Converting a downloaded CSV file to an Excel file significantly reduces the size. Saving the file as an Excel format from CSV can result in a drastic reduction in file size, as shown by the example file dropping from 16.4 MB to 3.18 MB.