Somebody really needs to make a simple program to extract a sims3pack to package without some fancy pants installer asking you a bunch of questions. I know Delphy has his sims3pack installer thing so maybe try that one out.
Once you get it to a package it's super easy to compress, just drop it on the s3rc.exe file from Pescado's site and that's it.
I tried, I failed on the compression part. I did everything you said, made my package, renamed it, dragged over the s3rc.exe put into the Mods/Packages folder, started game. No show. Had the bright idea to try CTU, the compressed files showed as original meshes, but the whole body was the textures, head to shoes. I laughed so hard.
Delphy's multi-installer made the package files, but naming them would be a mess if I had a batch to do. Compressed a copy of the packages with s3rc.exe, turned on the game, no show.
Deleted those compressed files and moved the original .package files extracted by the multi-installer and they showed up in the game. I guess I can only keep the original size after all. I must be doing something wrong. Bummer.
At least I have .package files now. Yay.