Battles now are much more about micro management. Spaces between fighting units happen, but only if you do not handle units right. It is just getting used to a new style of playing. I think it is far more realistic. Keeping formation was very important in medieval battles, it is now too in MTW2.
Even nowadays still a few men still the fighting, the rest just stand and watches.

Akka you can find plenty of tips in the forums how the units properly charge, You will find out that a right charge can be devastating, vaporizing units in less than 30 seconds. Even heavy infantry.

Many siege battles I play, the AI tries to push through my lines, all units packed together, also in battles on normal battlefield by the way.
By now hundreds have whined about the passive bug, well we know that by now, why bother again complaining.

RTW was silly, you just had to bang your units against another units and you could go and have a coffee. MTW2 battles are a lot more fun because of the micro management.