Very old thread, but for people still searching how to do this, here it is:
If you have no experience editing the CSS of Marketo forms, follow these steps. If you know what this is, just use the css below.
This will remove all vertical space between the fields. If you would like some space, just change the the height from "0px" to what ever you'd like. Personally I recommend 5px.
Hope this helps someone!