Hi Janine,
I think the reason you're seeing extra padding around your drop-down fields is that you have extra <br /> and <p> tags in your code. If you remove those from the areas with too much space, I think that will fix your problem.
As for using the shortcode to style your submit button, I would be surprised if that worked. But what you can do is have your developer apply the CSS they use to generate the shortcode style to the selector on the Marketo submit button.
Hope that helps!