Outside of making the map bigger and touching on the idea of open world (which I am pretty sure Larian does NOT want to do for a CRPG, but is cool in concept), this is a difficult matter. If we are not taking distance literally, then we have to understand what it means to create the ILLUSION OF DISTANCE. Right now, everything is really tightly packed together and "distant" parts of the map are observed as being quite close to wherever you are. One can consider that the experience of distance is largely dependent on how distance relates to time. If it takes a long time to get to a place, that place FEELS far away. If it takes a short time to get to that place, that place FEELS closer. Imagine how much tighter the world feels when you have a car versus on foot.
For example, if you can be in New York and get on a flight to Brussels in 2022, it feels like a day's journey, and the distance feels lesser.
If you are a trader in Egypt in 1600 BC, traveling to Crete from the Nile Delta can feel like a lifetime due to limited boat technology.
In other words, the experience of distance is tied to how much time it seems to take. A day/night cycle that moves faster than normal and indicates your few steps are actually taking several hours expresses the idea that you are actually traveling great distances on foot without having to argue that the distance just appears short. But there are other immersion problems with a d/n cycle, such as preserving a sense of urgency in your tadpole problem when days are passing just by your standing still. I'm not sure timed quests are really a fun mechanic in games these days. We all remember it in old school games, but not really modern ones. Who actually wants to be rushed through a game?
A day/night cycle or an expression of time still doesn't solve the problem of how tight the world feels and how "distant" locations are right next to each other. The upside to this design, and I imagine Larian has this in mind, is that having a tight world allows for a seamless transition from fun experience to fun experience without taking you to an overworld map or making you travel long distances for the sake of long distances (Think that line in the Mass Effect trilogy where the game-seller is talking about how the cool old-school games had you spending real hours to get from place to place, clearly mocking it), or taking you to a loading screen. There are upsides, but the world is just so damn tight that it makes it hard to take characters seriously when they talk about not finding places (Goblins/Minthara and Druid Grove), or how many miles are between your location and Baldur's Gate. Adding more transition areas between locations with minor interactions could be a way to slice it (more and longer roads between areas that are winding and have a single interaction on them, but are mostly designed to give an experience of world-scope and distance). IIRC you couldn't enter every building in Athkatla and some were there to give you the impression of scope. I also think the teleport portals borrowed from DOS2 are a bad way of handling fast travel in this game because: the whole game takes place in midday (except camp), locations are tight together, and you can instantaneously travel across the map. Honestly you could've just had a fast travel mechanic.
The tightness and the size of features around us also give us a bad impression of the scale of the world. Hillsides and ridges are the same size as two or three character models stacked on each other. Everything in the world design tells me, "This world is small, and everything is close together; the people who inhabit this world are just too stupid to figure it out." I'm not fully sure how to solve the theme park problem. I don't think it requires changing the map as a whole, but there certainly needs to be some way of creating the illusion of scope, scale, distance, and time.
